New year, new finance goals.
If your 2024 resolutions include financial goals, you are not alone.
67% of Americans hope to tackle financial resolutions in 2024.
Identify Your Financial Goals
The first step is to identify financial goals. We may want to save, pay off debt, and invest all at once, but we can’t do everything at the same time.
Achieve Financial Goals: Breaking Down Goals Into Small Steps
Whether your financial goals include building up an emergency fund, making more money, growing your retirement savings, making a down payment on a house, becoming debt free or just eliminating credit card debt or student loan debt, there are small steps you can take to achieve your financial goals.
Psychologist James Strickland writes on LinkedIn that one reason a goal may not get completed is because it feels “so large or daunting that we continuously push it off.”
You know you want to achieve financial success, so why does it feel so big? It’s common to feel overwhelmed when setting financial goals.
The key to achieving your goals is breaking them down into smaller, more manageable steps.
This not only makes it easier to stay on track and measure progress, but it also helps you stay motivated by celebrating small wins along the way.
Here are steps you can take to get going on your 2024 financial plan.
#1 Start an Emergency Fund
In life, unexpected expenses are bound to happen, and it’s important to be prepared for them. You may have heard that a typical emergency fund should have 6-9 months of expenses.
This may seem like a lot of money, and completely overwhelming when it comes to financial goal setting. Building up your emergency fund should be a priority, but it may be an ongoing process.
Don’t worry about the big number immediately. How about your 2024 goal being just “start an emergency fund”?
By setting aside a small percentage of your income each month, you can gradually build up this fund and be ready for any emergencies that come your way.
How about just getting started by setting up a monthly automatic deposit to your emergency fund account?
As you look at your financial priorities, if you have extra money, including gifts or bonuses throughout the year, you can add those to your emergency fund until you have reached your goal.
#2 Pay Off Debt
If you have any outstanding debt, it’s time to make a plan to pay it off. Start by tracking all your debts and their interest rates.
Then, prioritize them based on their interest rates, and start paying off the ones with the highest interest rates first.
You can also consider consolidating your debt and refinancing it to get a lower interest rate.
This may sound overwhelming. When you look at all of your debt, you may feel like you will never, ever pay it off.
Let’s break this down into manageable steps by choosing either the avalanche or snowball method to pay off debt.
The Avalanche Method
The Avalanche Method is a highly effective debt repayment strategy. It involves focusing your efforts on the debt with the highest interest rate first, while making minimum payments on your other debts.
Once the highest-interest debt is paid off, you move onto the debt with the next highest interest rate. This method can save you a significant amount in interest payments over time, accelerating your path to becoming debt-free.
It may seem daunting to tackle the largest interest debt initially, but remember, the Avalanche Method is about long-term gain.
As you pay off each debt, you’ll gain momentum, and the amount you can put towards each subsequent debt will increase, expediting the process.
By breaking down your debts and tackling them one by one, you’re making a huge, overwhelming goal much more manageable.
The Snowball Method
The Snowball Method is another popular debt repayment strategy, especially for those who need quick motivational wins.
Unlike the Avalanche Method, which focuses on interest rates, the Snowball Method targets the smallest debts first, regardless of the interest rate.
You start by paying as much as you can on your smallest debt while maintaining the minimum payments on your larger debts. Once that smallest debt is paid off, you then roll the amount you were paying on it into the next smallest debt, and so on.
This strategy creates a ‘snowball effect’, as your payments grow larger and more powerful as they move towards the larger debts.
Even though this method may not save as much in interest as the Avalanche Method, it can provide a quicker sense of achievement and motivate you to maintain your debt repayment plan.
Remember, the best strategy is the one you can stick to consistently.
Check Out Debt Payoff Apps
There are many debt payoff apps that may help you organize your debt repayment strategy. Here are a few you may want to check out.
Debt Repayment Apps
Debt Payoff Planner App
The Debt Payoff Planner is a user-friendly app designed to help users visualize and strategize their debt repayment journey.
This app allows you to input all your debts, including the balances, interest rates, and minimum payments, and then calculates the projected payoff dates based on your selected debt repayment strategy, be it the Avalanche or Snowball method.
The app provides a clear and easy-to-understand visual representation of your debts, illustrating your progress and giving you a clear picture of your journey towards financial freedom.
The interactive interface allows you to adjust your monthly payments and see how it affects your payoff timeline, empowering you to make informed decisions and stay committed to your financial goals.
Tally
Tally is a pioneering debt management application that endeavors to simplify and accelerate your journey towards financial freedom. The app’s primary function is to manage your credit card debts effectively.
After you link your various credit card accounts, Tally examines your financial situation and extends a line of credit with a lower interest rate, if you qualify. It then uses this line of credit to make automated payments towards your high-interest credit card debts, helping you save on interest over time. Tally also organizes your credit card payments, ensuring you never miss a due date.
By consolidating your debts and streamlining your repayments, Tally effortlessly alleviates the stress of debt management, fostering a more informed and proactive approach to achieving your financial goals.
Undebt.it
Undebt.it is a comprehensive debt management app that provides a clear roadmap towards becoming debt-free.
This intuitive tool allows you to list all your debts, their respective interest rates, and minimum payments, and then offers a systematic plan to pay them off based on your selected strategy – be it Avalanche or Snowball method.
The app provides an easy-to-understand visual chart that shows your progress over time, along with the estimated payoff dates for each debt.
But what sets Undebt.it apart is its powerful ability to handle both simple and complex debt situations. Whether you’re dealing with credit card debt, student loans, or other forms of debt, Undebt.it can cater to your specific needs.
Moreover, it also allows you to add extra payments, track expenses, and even simulate “what-if” scenarios to see how different strategies might impact your debt repayment timeline.
With Undebt.it, you’re not just managing your debts but also gaining valuable insights to drive your financial decisions.
#3 Prioritize Retirement Planning
It’s never too early to start saving for retirement. Consider opening an IRA or a 401(k) account and contributing to it regularly. The earlier you start, the more time your money has to grow, thanks to compound interest.
Saving enough money for retirement may seem overwhelming. How about making a 2024 goal to just open the account and start automatic monthly contributions of an amount you can comfortably afford, like $50?
Once you have the ball rolling, you can add to your contributions if finances allow.
#4 Invest in Yourself
Investing in yourself may seem like a vague concept, but it can come in many forms. It could mean going back to school to get a degree or certification, taking a course to learn a new skill, or even hiring a financial advisor to help you build your wealth.
Whatever it is, don’t be afraid to invest in yourself and your future. Which brings us to our next goal that may help you break down and focus on this goal with more precision.
#5 Increase Your Income
“Oh sure,” you may think as you roll your eyes, “everybody wants to increase their income and achieve financial success.”
Who doesn’t want to have more income streams. more money, cash and spending money?
We know. It’s easier said than done.
How about breaking this goal down into some more manageable steps?
Sit down and write a list of possible ways you could increase your income in 2024. Write anything and everything you think of. Do not edit yourself. Could one be asking for a raise?
Then look back at the list and write down steps you could take to actually start the action of that work. Do you need to take classes? Do you know someone who works in these fields that you could talk to? Is there a seminar you could attend to learn more about these options?
Choose one and just explore the idea of this way of increasing your income.
Perhaps one of those ideas on the list was, “freelance copyediting.” Do you know anyone who works in publishing? Invite them for a coffee and ask if you can talk to them for thirty minutes about publishing.
Maybe you think you could make extra income as a freelance social media manager. Look on YouTube for videos about this job.
Do you love pets and want to make extra money as a dog walker? Post something on Facebook offering to watch dogs for the holidays. Maybe you get one message. It’s a start.
Don’t worry if you don’t have extra money rolling in from a lucrative side gig immediately. How about you just make your 2024 goal to get started exploring opportunities?
#6 Live Below Your Means
We know. Living below your means sounds aggressively boring and brings to mind images of eating vegetables out of a can.
This is not what we mean.
Living below your means can be as simple as eliminating one event from your calendar per month.
Do you have a weekly dinner with friends?
Why don’t you suggest that one time per month everyone comes over to your home and bring a dish of food?
How about in the summer months, you change that weekly dinner to a walk or tennis game?
Look at your credit card and bank statements and see if there are any subscriptions you can eliminate.
Find little ways to save money without killing all the fun in your life.
Stock up on gifts during sales so you are not stuck buying something at the last minute for a birthday or holiday. Keep a “gift box” in your closet at the ready so you are always prepared for the next gift giving obligation and are not scrambling and racking up more credit card debt just because it’s the last minute.
In 2024, try taking small, simple steps towards living below your means.
What Now?
Setting personal finance goals like starting an emergency fund, paying off debt, saving for retirement, investing in yourself, increasing your income, and living below your means can seem overwhelming. However, you can take steps towards achieving the life you’ve always wanted.
Remember, it’s never too late to take charge of your finances and secure your financial future.
There is also no step too small to make towards your long term financial goals. How about just picking up a classic personal finance book or one to get your money mindset on the right track?
Oh and hey, guess what?! You actually just completed a step in achieving financial success through prioritizing financial goals because you just read this article.
Whatever your financial goal is, write it down. Below the goal write Step 1: Research financial goal action steps and write a check mark next to that.
Nice job. You are already on your way.
