Remember the winter – when you were popping champagne with friends and crowding around the TV to watch the New Year’s Eve ball drop? This year held so much promise.
In fact, you may have been among the 41% of people who make New Year’s resolutions every year. Perhaps you even resolved to get your finances on track for good.
Time flies, doesn’t it? We’re mid-way through 2018 and now is a great time to check in on your online bank account to see if you’re on track to meeting your financial goals. Nervous? Don’t be.
We’ll show you how to assess your progress. And, if you think you can be doing better, well, don’t worry — we’ll show you how to get back on track so you can end the year strong. Take a look at our top 3 steps to shore up your financial game plan for the year.
Step 1: What’s your measurable end-point?
“Be better at money” and “save more” are noble goals, but they’re a bit wishy-washy. For example, are you “better at money” if you’ve bumped up your retirement contributions, yet you’re still overdrawing your checking account? Have you really “saved more” if you’ve only saved five dollars? What about $500?
See what I mean? It helps to have a clear-cut defined goal.
Here are some examples of solid financial goals:
- Save 10% of your paycheck towards retirement
- Set up a $1,000 emergency fund
- Get one month ahead on monthly expenses (and know what that number is)
- Pay zero bank fees
Once you have a measurable end-point for your goal, you can track your progress against this goal like a measuring stick.
Step 2: How close are you to reaching your goal?
There are two ways to reach a goal. You can do it in short bursts and sprints (like if you’re expecting a big bonus or raise), or with a slow, steady, constant pace (like if you set aside the same amount of money every month).
If possible, it’s a better idea to go the steady turtle route since this will help you make a habit of it. After all, once you get a big bonus or raise, you’ll be able to find 10,000 different excuses for how to spend the money (hello, sushi bar — you deserve a nice night out, right?)
If this is the case, and you’re trying to save a constant set amount, try this: divide your total goal amount by 12 (one for each month of the year).
For example, if you’re trying to pay off a $5,000 credit card balance before the end of the year, you need to pay roughly $416.67 per month (it may be a bit more, assuming interest will be tacked on each month). Or, if you’re trying to save $4,000 into your emergency fund, you need to set aside $333.33 per month.
Now, multiply that number by how many months we are into the year. If you’re doing this in July, for example, you would multiply your monthly number by seven. This will tell you how far along you should be if everything is going according to schedule. For our credit card example, you need to have paid $2,916.69 so far. If you’re shooting for a $4,000 emergency fund, your savings amount should be $2,333.31.
Step 3: Celebrate! Or, knuckle down.
How close are you to meeting your goal? Are you on track? That’s great – congratulate yourself!
If you’re not on track, no worries. There’s still plenty of time to try to reach your goal. Here are some tips to help you get back on track, or stay on track:
Automate your finances
The best way to make progress towards your goals is to take the routine hassle out of it and automate your finances. You can set up automatic debt payments or transfers to your savings account by logging into your account or calling up customer service.
Up your side hustle game
A great way to make more money to reach your goals is by starting a side hustle. If you like people and have a new(ish) car, you can try driving for Lyft or Uber. Spare room in your home? Try renting it out on Airbnb. Have a few minutes while you’re watching TV? Try filling out surveys or doing VA (virtual assistant) work. You can even get a part-time weekend job at a fun store or business. The options are endless.
I guarantee you that no matter what your goal is, there are a ton of other people out there reaching for the same thing. Why not try to find them in online or real-life support groups? You can be as open or as anonymous as you want. What counts is hearing stories and getting support from other people who are going through the same struggles as you.
Get professional help
Need some serious accountability and advice? Try reaching out to a fee-only financial advisor or financial coach who can help you get back on track. The XYPN Planning Network is full of great advisors and coaches who can help you.
You’ve got this. If you’re currently on track, all you have to do is keep up the pace. If you’re falling behind, don’t worry. Even if you won’t reach your original goal, you’ll still make a lot of progress just by trying. After all, no one ever ended the year and said, “gee, I wish I had less money saved,” or “wow, I wish I hadn’t paid off so much debt over the past year.”
If you buckle down and start working toward your financial goals now, you’ll be in a better spot by the end of the year than you are right now. What’s not to like about that?