Sunday, December 30, 2012

Financial Goals 2013

It's the last day of 2012! Maybe 2012 didn't become all that you hoped, and since they Mayans prediction of apocalyptic doom didn't happen, perhaps you have a bit of a financial hangover, or at the least, you didn't accomplish any of the goals you set for yourself.  The time to think about this next year is now.

Think about the goals you would like to accomplish in 2013. Do you want to get out of debt?  Is there a family vacation you have been dreaming about?  Do you need to pay off your student loans?  Do you need to start a college fund for your kids?  Have you started a retirement fund yet?  Perhaps you want to be a stay at home parent, or start your own business in 2013.  Maybe you just want to buy a new car or that big flat screen TV you have been salivating over.  What are your life goals this year?  What are your financial goals this year?  Now is the time to ask yourself those important questions!

Here's the plan, and yes, you actually have to have a plan:

Step 1. Write down your goal.  If you don't write it down, its just a wish. You can't build a foundation for a castle in the sky.  The purpose of writing down your goal is to make yourself accountable.  You need to look at your goal weekly to remind yourself of what you are doing and why you're doing.  Sometimes goals require uncomfortable sacrifices and if you have that reminder in front of you, it allows you to stay focused on what is important to you. 

Step 2.  Write down what it will take to accomplish that goal. 
  • Does it mean picking up an extra shift or working a second job? 
  • Does it require giving up your daily trip to Starbucks for a Venti Mocha?  
  • Does it require you to start living a more frugal lifestyle? 
  • How much do you need to save to accomplish your goal? 
  • How long will it take to achieve your goal? 
  • Where are you going to save your money? 
  • How much time or money are you willing to sacrifice each week to achieve your goal?

Step 3.  Implement the goal.  This is the moment when you must do the hard work.  Unless you want to be like Sisyphus, rolling a rock up a hill, only to have it crash back down on top of you, you have to be ready to put your plan into action.  While I reccommend creating a budget, I understand that not every situation allows for that.  At the least, you need to know how much you earn and prioritize your spending from there.  It will help to look at your past spending to see how you have spent your money.  This will take about 2 hours of your time, but it is worth every second.  It never hurts to do a financial check up, even if you do budget your expenses. 
  • Pull your bank and credit card statements from September or October of 2012 and categorize how you spent your money for an average month. (November and December tend to be bad for averages because of the holidays).   
  • Divide your spending into categories: housing, utilities, transportation, insurance, medical, entertainment, food, clothing, savings, and miscellaneous.   
  • What do you absolutely have to pay every month?
  • How much can you reasonably set aside to achieve your goal?
  • What are you spending money on each month that can be eliminated?
  • Is there a way to reduce or consolidate what you have to spend?
Once you are aware of where your money is spent, you can take it a step further.  Become conscious of your spending. 
  • Think about what you are purchasing and why?  
  • Is there a more affordable way to achieve what you need? 
  • Can you borrow the item or barter for it?
  • Do you have a coupon or discount?
  • Can you survive without it? 
  • Will it help you achieve your goals?
I hope this will help you begin the year on the right foot. Well that is a wrap for today Frugal Friends, I would love to hear all about your goals for the new year!   

Tax Tip:  Today is the last day to make contributions to your IRA, make charitable donations, prepay  tution for next year, or pay your property taxes, in order to deduct these itemized expenses on your 2012 taxes. 



Welcome Frugal Friends

As 2012 draws to a close, I realize we face an uncertian future: tax increases, national and personal debt, health insurance mandates, inflation, and a host of other mindboggling issues that might cause most of us to lie awake at night, and at the very least, cause more than a little anxiety.  There are a lot of things we cannot control in our world, but there are things we can take control of: our lifestyles, our personal finances, and our own choices.
Starting in 2013, Frugal Friends will be sharing ideas about: shopping, tips on frugal living, how to set financial goals, lower your tax burdens, get out of debt, save money, make extra money, protect your family, and achieve financial health and peace of mind.  We look forward to your feedback, your ideas, and suggestions along the way.   Bookmark our page!