With the new year comes new year’s resolutions :). Here are 3 financial workout goals to aim for this year!
Flex That Financial Muscle. You can’t make money (outside of your normal salary) without putting money to work first. And you even lose money and opportunity when you hold cash or hang on to high-cost debt. I would put cash on a strict workout plan by: 1) maximizing retirement accounts, and 2) investing in your own carefully vetted ideas and opportunities.
- Quick tactic: Set up an automated withdrawal or deposit that takes money from every paycheck and deposits it into an investment or retirement account and/or find a side hustle to help juice up your savings rate or pay everyday expenses.
Trim the Fat. Do you know where your money is going? Do your expenditures match your priorities? When’s the last time you’ve shopped around a recurring, high cost bill? I can almost guarantee that every one of us can save hundreds or thousands of dollars a year by auditing our expenses and price shopping our major expenditures. Remember, $50 a month savings adds up to $600 per year. Between cable, internet, cell phone, insurance, car, and other expenses I’m pretty confident you can save at least $600 this year! And don’t forget that you may not even be aware of what fees you’re paying or underestimating how certain fees are costing you.
- Quick tactic: many credit cards that charge annual fees will give you a retention bonus if you call them up and tell them you’re thinking of cancelling. The same probably goes for other recurring charges as well, such as cable, internet, phone, etc.
Track Your Progress. Invest time in tracking your financial progress — otherwise, how would you really know if you’re on the financial path you want to take? So instead of trying to navigate a (financial) jungle without a map, take charge of measuring and tracking your progress which will also help you keep an eye out for opportunities to grow your net worth, and can protect you from unscrupulous ‘financial advisors.’
- Quick tactic: I model out retirement savings goals and assumptions by year to help me develop a savings and investment plan. Other metrics to track include: investment return, passive income generated, total and net asset growth, savings rate, and liquid and illiquid investments.
On a personal note, 2016 was the first year I seriously went about doing all three things I mentioned above — and it honestly didn’t take more than a couple hours a month to do it. Because of this, I was able to save more than 50% of my salary and travel more and increase quality of life. I feel more in control of my destiny now, and less stressed out about little things in life :).
Now, if only my physical workouts were as successful as my financial ones have been!
What are your goals in 2017?