By Kelly Hodges
With three months of 2012 behind us, now is a great time to revisit the financial goals you set for yourself at the start of the year. Are you making progress? If you’ve gotten a bit off track it’s ok, now’s the time of year when the enthusiasm felt on January 1st tends to taper off. The good news is that there is still ¾ of the year remaining, which allows plenty of time to reenergize and refocus to accomplish all that you set out to for the year. Didn’t get around to setting financial goals this year? That’s ok too, now’s as good a time as any to envision what you’d like your financial position to look like come 2013, and what it will take to get there. If you’re looking for inspiration, here are some common financial goals for 2012, and tips to tackle them.
1. Track your spending. Many people set out fired up to track where their money is going at the start of the year. The first few weeks of January result in diligent tracking of every penny, but come second quarter that practice is a distant memory. Anyone who’s ever attempted to accurately track spending knows it takes quite a bit of time and dedication to record every transaction you make day after day after day. Luckily, there’s a great website (with accompanying mobile app) that virtually takes all the effort out of tracking spending- and the best part is it’s free! Mint.com makes following your money effortless and dare I say it, fun! After connecting your bank account(s) and credit card account(s) to the site, Mint automatically logs each transaction for you. Mint even categorizes each purchase so you can see in beautifully displayed pie charts how much you’re spending on housing, food, clothing, etc. For everyone who has tried to track spending and failed, this site is for you.
2. Eat out less. Everyone knows it’s cheaper (and usually healthier) to eat meals prepared at home, so eating out less is a popular New Year’s resolution. For someone who’s not use to cooking much themself, this can be a tough resolution to follow. To really follow through on this one, it’s important to be realistic. If you currently eat out three times per week, it would be hard to quit cold turkey. Instead, commit to eating out only once or twice a week instead so you’re more likely to follow through. Then, make sure you are organized and utilize meal planning, so you’re not stuck with nothing to eat in the house come dinner time. Even if you cut out one restaurant/take-out/delivery meal per week at a cost of $20 (which is a conservative estimate, especially for a large family) you will end up saving $1040 for the year!
3. Start (or increase contributions to) retirement savings. This is not a goal that should not be put off! If you wanted to set this up this year but haven’t gotten around to it, now’s the time! Yes the process can be a bit overwhelming as there are so many different types of retirement savings accounts and so many options to invest in within those accounts, but the bottom line is that anything you choose will be better than doing nothing at all. Schedule to meet with a financial planner to help get you started, and once you decide on a savings plan automate your contributions so you don’t have to think about it. Don’t let procrastination today result in delayed retirement tomorrow.
4. Pay off debt. For anyone carrying credit card or other high-interest debt, this should be the #1 financial goal of 2012. Many start off determined to get out from under their debt in January, but then begin to feel discouraged by the seemingly slow rate of progress from their efforts and give up. It’s difficult to tackle debt without a real plan. If this describes you, then Dave Ramsey’s “debt snowball” program may give you the psychological boost you need to help reenergize and refocus on getting out from under that debt. The debt snowball involves listing all debts from smallest amount to largest amount (note how interest rate isn’t a factor). Then all focus is concentrated on paying off that first, smallest debt. This gives a motivational boost as you watch that 1st debt shrink smaller and smaller and then get wiped out completely. Then you move on to debt #2 until it is gone, then #3, and so on. By using this approach you are able to see real progress and stay motivated, which helps you to stick with this goal.
Whatever financial goals you’ve set for yourself, make sure you are on track to achieve them. There’s plenty of 2012 left to do it!
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Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of her employer or any other person or entity.
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