2016 Financial Goals and Resolutions – How Are You Doing?

Jan 31, 2016 | By: Jennika Lee

If you are like me, you made your 2016 resolution list a little over a month ago. How are you doing with your short- and long-term financial goals? Here are examples of resolutions to add to your list. This is a great time to give your 2016 resolutions a second look.

  • Consider selling unwanted possessions in 2016. It will help your cash flow and organize your belongings.
  • Have a steady job? Work-life balance is important, but don’t work less to play hard since your income stream usually is the source of achieving your financial goals. Work hard and play hard.
  • No steady job or don’t like the one you’ve got? Make it your goal to send out a certain number of resumes per month. Construct a good resume and stick with your mailing schedule. Send them out until you find the job you are looking for.
  • Sometimes there is only so much you can do to increase your earnings. Often, however, you can do a lot with your spending. Go through your checkbook and credit card statements; find out where you can cut down or cut off.
  • Habit of spending too much on the unnecessary? Consider using the cash envelope method. Specify your maximum spending in each category. Make a firm goal such as “cut $80 per month off the grocery bill.”
  • Prepare for the unexpected. The rule of thumb is to save three to six months of living expenses, but everyone’s situation is different. Set your target amount based on your needs and comfort level.
  • Remember that emergency funds should be a liquid asset such as checking, savings, or money market accounts, even cash on hand. Don’t use a long-term investment like your retirement or investment account. And, don’t use credit cards or a home equity line of credit as part of your emergency fund!
  • Prioritize your debt and make a manageable goal. Remember to make your goal very specific. A goal such as “pay off loan” or “save more money” is the worst type of resolution. Clarify your goal, such as “pay an additional $250 toward my student loan each month” or “save $100 per month in my 401(k).” Also, make it easy by setting up automatic bill pay.
  • Know your short-term (1 year), mid-term (2 to 5 years), and long-term (5+ years) needs. In other words, create a budget for your life. Think ahead about what you will need in the three buckets. A car replacement in 3 years? A daughter’s wedding in 5 years? Retirement in 15 years? You will then have a better understanding of how to allocate your assets and how much money will be needed to achieve your financial goals.
  • Identify potential areas of risk, such as a large medical expenses, disability, long term care, or premature death. Consider the best ways to prepare where you may be lacking. More insurance might make sense, but let us help you consider your options since it’s possible to be over insured or have unnecessary coverage.

In short, understand what you have, what you need, and manage your spending.

Let’s start small and stay committed. May you look back on 2016 as one of your best years yet! Contact us if you have any questions. We’re happy to help you plan ahead to reach your short- and long-term financial goals.

Jennika Lee

Jennika Lee

CPA, MBA

jennika@jgcwealth.com

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