Are You Resolving To Have A Financially Smarter New Years?
Let me make a prediction! I am quite certain that 2012 will bring about a rise in TV specials, probably on the History Channel, about the rise in Doomsday predictions. These TV shows will probably generate a lot of discussion over family dinner tables and office water coolers. Enjoy.
Just in case the Mayan calendar is wrong, and 2012 isn’t the end of everything, perhaps we should take steps to improve our financial lives in 2012. Ignore Doomsday! Occupy your own financial life.
I am not suggesting that you take any extremely frugal measures like re-using cloth toilet paper or only using baking soda to clean – though some people actually do this. I am simply suggesting it is time to set some goals, and then make some plans to reach those goals!
Do you have any financial fitness resolutions for the new year?
If not, let me repeat myself.
- Set financial goals.
- Make plans to reach those goals.
Of course, you should set realistic goals. Some should be long term, while others should be short term. Even if you do not reach every milestone, you will probably be better off than you would have been if you had no strategy in place. So these goals and plans should not generate anxiety, but should simply be about improvement.
What Are Some Obvious Financial Goals?
You may not even know where to start. If this is true, let me make some simple suggestions.
Short Term Financial Goal – The Emergency Fund
One alarming article suggested that half of Americans say they cannot raise $2,000 in 30 days. Let’s set a goal to be in the other half. An emergency fund can save you from all sorts of financial headaches, and it can help you stay out of debt in the future. So, in my opinion, your first order of business should be the establishment of an emergency fund.
This may not be a problem for you, but it may be a problem for your kids, or even your parents! If you can improve the financial situation of people you care about – and probably care for – it can help you too. So pass this tip along!
How can you plan for this? Simply set aside $100 a month, and then reach your $1k goal by October! If you are disciplined, you may decide to keep the emergency fun in your checking account. For example, you could 0 out your balance at $1k – $2k. You know the extra money is there, but you are telling yourself not to spend it unless you really have an emergency. If you are less disciplined, it may be wise to set up a seperate fund that is a little more trouble to access.
Longer Term Goals – Education And Retirement
These are longer term goals, and you should already have some sort of plan in place to reach them. You know the IRS allows people over 50 to make “catch up” IRA contributions. Maybe it is time to take advantage of that rule to lower your taxes now and improve your retirement account balance later.
If your kids are still home, give them their own savings accounts. Make a plan to contribute to them, or help your kids set aside a portion of their own earnings or gift money into them. When they head off into the world, they will need some money!
Improve!
Again, this isn’t about setting unrealistic goals you will never meet. It is about making some realistic financial plans that will help you in the future. Here’s to a Happy 2012, and the hope we have a Happier 2013!
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