Whether your finances are in perfect order or its a daily struggle, setting yearly financial goals is important for everyone! So, here are the critical financial goals you should aim for in 2020 and beyond…
Set Up A Budget
When it’s time to set up any goals in the upcoming year, creating a budget is the most crucial step. After all, for any financial goals, from something small like a gift for a friend to buying your first home, you need concrete goals and timelines. Believe it or not, according to a 2019 study showed the 60% of Americans put no money into their savings accounts every month, and just as many did not have monthly budgets! Another study showed that those without budgets are likely to waste up to $500 a month on discretional spending! Think about what you could do with an extra $6,000 a year…
Manage Your Credit Score And Taxes
Next, check how your credit score is doing! All of the previously mentioned goals, like buying a house or taking out a loan will require a solid credit score. If, after taking a look at your credit score, you find its low, raising it should be your first financial goal of 2020. If you don’t know how to start building that credit score, take a look at your debts, and open credit accounts. They are most likely to be responsible for a low credit score.
Pay Off Debts
Looked into your credit score and discovered that you have multiple sources of debt? Don’t panic! It might seem like an impossible challenge, but, in fact, you’ve just found your next two financial goals for 2020! First, determine which debt you should focus on paying off first. Almost always, this will be credit card debts, as they have the most significant drain on your credit score. Then, start paying off those debts! Becoming debt-free should become the number one financial goal for most Americans in 2020.
Create An Emergency Fund
After you finish paying off debts and building a budget that you can stick to, think next about creating an emergency fund. An emergency fund is exactly what it sounds like: a set-aside amount of money, only to be touched in dire situations, like losing a job. A rainy day fund should include enough for four to six months of usual expenses, including everything from gas and groceries to eating out and partying. Without this fund, should an emergency arise, you might find yourself in serious trouble.
Start Using A Financial Planner
Whether in person or entirely virtually, start using a financial planner. Apps like Mint, Acorns, YNAB, and Prism all make it easier than ever to not only create the right financial goals this year, but actually stick to them! Even better, if you can afford it, hire a financial advisor. While it might not seem like a worthwhile investment at the beginning, many end up sticking with their financial advisors for years, working to create the best plan every single year.
I doesn’t matter if you’re just starting to take care of your finances or have done so for years, there are plenty of financial goals to hit in 2020 that will make your life so much better! Now, go get ’em!
Sources: Finance101, RuleOneInvesting