Keep these 10 financial goals in mind as you embark on a new year.
1. Create Your Own Financial Goals
What do you want to achieve financially this year? How about over the next five years? Maybe you want to save for a vacation, pay off a loan, start saving for retirement or complete a home improvement. Did you know you're more likely to achieve goals you write down? Better yet, create a vision board with pictures of these goals and look at it regularly. When you consistently visualize yourself achieving these goals, they're more likely to come true.
2. Prioritize Financial Literacy
Many of us haven't taken a financial course, through no fault of our own, as it wasn't mandated in our K-12 education. If you search "Kahn Academy Financial Literacy" online (bit.ly/KALiteracy), you can find a free, 14-unit course on topics including budgeting, debt, insurance, consumer credit, investing and more.
3. Review Your Budget
With your financial goals envisioned and the financial education to support you, create a plan to achieve your goals by including them in your budget. Not sure where to start? Check out online resources like mint.com to digitally track your budget and search "Dave Ramsey Useful Forms" (bit.ly/DAUsefulForms) and use the "Monthly Cash Flow Plan" to get started.
4. Look for Ways to Save Money
"A penny saved is a penny earned." When was the last time you shopped around for your cable, internet, cell phone service or car insurance? What about subscription-based services? Are you using them enough to justify the cost? The more you save, the faster you can achieve those one- and five-year financial goals.
5. Build an Emergency Fund
Have three to six months of your monthly expenses saved in a bank account for emergencies. You can consider investing it in a money market or CDs at your bank to earn you a higher interest rate. If you have a hard time not spending the money and putting it in an "emergency fund," you may want to consider opening a savings account at a different bank from the one you normally use and working with your employer so that every time you get paid some money is deposited into that bank account.
6. Prioritize Saving for Your Future
Did you know? Social Security, on average, will only replace about 40% of your income in retirement? You need to invest in your future self by saving for retirement. If your employer offers a 401(k) retirement savings plan, that is a great way to start. Another option is an individual retirement account (IRA). Work towards saving at least 10% of your income in your retirement account.
7. Use Your Health Savings Account
If you use a high-deductible healthcare plan, consider using a health savings account to pay for your healthcare expenses. Why? Let's say you're in the 12% federal tax bracket; for every $1,000 you save in your Health Savings Account, you could save $120 in federal taxes.
8. Review your Credit Score and Credit Report
You can get a free copy of your credit report at annualcreditreport.com every 12 months. Your credit score can affect your mortgage rates, credit card approvals, rental applications and even your job application. You should review the report to ensure the information is accurate. Reviewing your credit report can also help you catch identity theft early.
9. Review Your Insurance Coverage
There are two reasons to review your insurance coverage: 1. To ensure you have enough coverage in place. 2. To ensure you have competitive pricing. In addition to health insurance, auto insurance and homeowners/renters' insurance, make sure you have appropriate life and disability insurance in place.
10. Consider Working with a Financial Advisor
If you don't already, consider working with a financial advisor who can help you prioritize your financial goals and recommend the best next steps for your financial journey.
Melissa Jean Stewart is a CERTIFIED FINANCIAL PLANNER® professional and Founder of ClearVista Advisors. She helps clients maximize their net worth through financial planning, investment management, and tax minimization strategies.
This article originally appeared in the Dec '24/Jan '25 issue of West Michigan Woman.
This material has been distributed for informational purposes only. All investments carry certain risk and there is no assurance that an investment will provide positive performance over any period of time. Past performance is not a guarantee or a reliable indicator of future results. Melissa Stewart is an investment advisor representative of Dynamic Wealth Advisors dba ClearVista Advisors. All investment advisory services are offered through Dynamic Wealth Advisors.
