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How to Achieve New Financial Goals

How to Achieve New Financial Goals

Now is the perfect time to pay a great deal of attention to an important area in your finances — achieving new goals. Creating and sticking to a new financial plan can be the single best thing that you do this year. With the help of a budget, it will force you to take a look at the money that you bring in and shell out, and also your existing debt.

Build an emergency fund

Calculate your monthly expenses to decide how much money you need in your emergency fund. This should include your basic needs, such as food, rent, utilities, and mortgage for at least three to six months.

You may try to keep your emergency fund in a high-yield savings account. These accounts will allow you to access your savings more quickly. However, keep in mind that a high-yield savings account accrues interest at a higher rate than a traditional savings account.

Pay off your credit card debt

Paying off your credit card debt can result in healthy finances for you. If you don’t, you’re doing your credit score harm. It’s recommended to open a balance transfer credit card as this type of card can help you consolidate your debt and stop it from collecting interest for a while.

Spend less

Spending less is doable with a few tweaks to your spending habits. Look at your budget and find things you can cut back, like eating out and coffee runs. Take a look at these simple ways to save:

  • Pack lunch to work.
  • Eat at home.
  • Make a grocery list.
  • Clip coupons.

Set SMART goals

It’s a new year and most people want to see some change or improvement in their lives. Setting new goals is an effective way to motivate and help you create these changes, such as improving your health, relationships, or productivity at work. 

Having a goal is a good way to focus on the more important things. It allows you to create a vision and develop effective strategies to achieve that goal. 

In deciding what you want to achieve, start with identifying any goals associated with your strengths. Make your goals achievable, realistic, and in balance with your life. Once you have decided, the SMART theory might be of help. SMART, which started in the 1980s, gives criteria to guide in the setting of objectives.

Below are the 5 criteria of SMART goals: 

  • Specific. Your new goal should include the 5 Ws (what, where, when, why, and who). 
  • Measurable. Your goal should include a quantity such as how many or how much. 
  • Achievable. A better result can come from setting a harder goal as long as it’s achievable. It can be discouraging and could lead you to give up if the goals are too difficult. 
  • Realistic. Your goal should be practical for you and your situation. Making goals realistic can help to make you commit and improve your chances of achieving them.
  • Time-related. Set a timeframe and an endpoint. Deadlines can motivate your efforts and make you prioritise the task at hand.

It is better to break down goals into smaller steps so  you can have a sense of achievement every time you finish them. It also prevents you from becoming overwhelmed by much bigger undertakings.

Tracking measurable items and seeking regular feedback from others are also important as it allows you to know if you are on the right track.

Investing can be one of your new goals

Investing should be on top of your list this year. Think of ways to obtain assets that have the potential for a profitable return.

Although it can take some time to wrap your brain around the process of investment, there are advisors, including robo-advisors, that can help you decide what to invest in, and when to buy and sell.

Check out and familiarise yourself with these investment terms to get you started: micro-investing, stocks, and automated investing.

If you liked our “How to Achieve New Financial Goals” and find it useful, check our blogs regularly for more info on how to get out of debt and updates on the best budgeting apps in Australia.