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#NewYearsGoals … Invest in Yourself This Year!

It’s now the end of January as I write this and almost a month has passed since New Year’s Day. I don’t know if it is because I am getting older or perhaps it’s the tumultuous state of our country right now, but it seems like this year, I’ve listened to so many others talk about NOT setting goals because they are sure to be broken after a couple weeks or months of undoubted procrastination.

I wonder how many people are feeling like they need to quit right now? Well, I’m here to tell you don’t do it! There is a lot you can do to keep your yearly goals on track, and that is an amazing feeling.

There are a bunch of “resolutions” we can talk about from exercising more, (my personal favorite considering the number of new yoga pants in my dresser drawer) to saving money to buying a new home or vehicle.

Whatever your goals are for the year, at least one of them should be focused on investing in your future. And part of investing in your future comes down to setting aside money in your budget to allocate towards paying off your student debt, paying down your credit card, setting aside money for retirement… or if you’re really on top of it, all of the above.

I take a systematic approach to saving each year. I look at my fixed needs each month – rent/mortgage, utilities, car, loan debt, etc. and then I put those figures in a monthly spreadsheet. I calculate how much, on average, I need each month to live. Then I ask myself, “Can some of these expenses be reduced slightly?” For instance, ”Can I ride my bike more instead of drive my car to work? Can I pay a little more each month to reduce interest on credit card debt?”

Then, I look at my lifestyle choices. While you may want to set the bar really high and only set aside a small amount for things like going out with friends, planning for medical costs, or family birthdays, the reality is life happens so be honest with yourself here.

Once you have taken in to account what you make each month and have applied that towards your expenses, how can you reduce areas of your lifestyle budget to add in, even if it’s $1/week to your retirement account or better yet, reducing debt.

And here’s the kicker with whether or not you should pay your debt off or start building your retirement. While I think it is absolutely essential to save for retirement, and the younger the better, before you focus on building your nest egg it is critical to first come up with a plan to pay down debt. There are many different philosophies on how to approach debt, but most would agree that step one is to stop using credit cards and step two is to lower your interest rates. Just think, the sooner you get rid of your debt the sooner you are paying yourself instead of giving your money to credit card companies and loan providers. Take a year, get on track with your loan debt, and then budget in a healthy but realistic retirement figure.

Now, if your company offers a 401K match or any type of match program, take it. That’s in essence free money you can take advantage of through your employer.

By the way, I am no financial planning expert, but I have had many friends and family who are try and teach me some of these lessons over the years. Thankfully, I’m finally to a point where I feel like “living” can be managed by being frugal, debt-free or at least lean, and proper planning for retirement isn’t keeping me up at night as much as it used to.

Whatever you do, don’t get caught up in the waiting game. Time is the most important factor in saving for retirement. There will never be a perfect time to start saving. So be disciplined, start with a little, and start now. Once you build a savings habit, increase the amount you stash away each year.

So, to recap, here are some simple steps to stick with a realistic financial resolution this year:

Know your budget and get a grasp of your spending habits:

• Create a budget worksheet
• Identify ways in which you can reduce spending such as eating out less or cutting cable costs
• Consider mandatory needs and eliminate casual spending
• Give homemade gifts as opposed to pricey retail items
• Assess your debt and set a strategy for paying it down consistently:
• Talk to your loan providers to see if you can optimize pay dates and amounts to fit your lifestyle
• Find tools that support automated payments that keep you on track each month
• Take advantage of company benefits
• Invest in a 401k plan, especially if your company offers a matching program
• Research healthcare options such as health savings accounts
• Consider car pooling or look into alternative transportation offerings

If there is one thing you commit to resolving this year, it should be getting a grasp on your financial situation. It may take some time to set this up in the beginning but once you do, you’ll be surprised at how easy it is to maintain. There are also of ton of free online resources like Student Loan Hero and Penny Hoarder among others, that can help educate yourself on how to plan and manage your finances so you can be confident in living your life the way you want.

Educate yourself on where you are now and where you want to be in 1, 5, 10 years from now and set a plan in place to get there. You’ll be happier for it and maybe you won’t fall into the group of people that constantly talk about how this past year sucked so hard.