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Finances and Budgets: How To Set and Reach Your Financial Goals

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Every year on January 1st, most people set New Years resolutions. Near the top of the list for many is the resolution to get financially fit in the new year. All the intentions, resolutions, or goals set at the start of the year are doomed to fail, unless there is a plan in place to reach those goals. By implementing the following suggestions you'll have a plan in place that will help you reach your financial fitness goals.

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How To Get Financially Fit

Organize

The first step you take must be to organize your finances. You need to assess your current financial situation in order to see where your focus should be. Grab a pencil and a notebook and make a detailed list of all debts and financial obligations you have. Now would be a perfect time to order your free annual credit report. Now is also the time to set up a filing system that will work best for you. You need an organized way to save all those receipts and financial documents you will receive throughout the year.

Budget

Having a budget in place gives you a guideline to follow and can help you keep your spending on track. Here is where you need to make a detailed list of all the income you receive. Now, take your list of debts/obligations that you made in the step above and subtract that total from your total income. Are you living within your means?

Set up a system for tracking your expenses throughout the year. This could be as simple as writing every expense down in a notebook, making and tracking it in a spreadsheet, or there are many financial tracking software applications on the market, including free web based apps, such as Mint. As you track your expenditures, you will be able to monitor exactly where your money is going and can cut any unnecessary spending.

Set Financial Goals

Having concrete goals, written down, that you are making progress toward can be very motivating. Be sure to set a variety of goals that will take different amounts of time. Short-term goals, such as paying your bills on time, should be easy to reach in a short amount of time. Mid-term goals, such as paying off credit card debt, starting an Emergency fund, or saving for a vacation, should be a little harder to reach and will take a longer amount of time.

Finally, be sure to have some long-term goals set up, such as saving for your children's college fund or retirement. Having these goals written down will help you plan the best use of your money. Review your progress regularly, re-assess and adjust as needed.

Getting financially fit should not be your ultimate goal. Your ultimate goal should be to maintain your financial fitness throughout your lifetime. By setting concrete, realistic financial goals at the beginning of the year, and with regular review and re-assessments throughout the year, you should be well on your way to the lifetime goal of financial fitness.

What are your financial goals for 2012? How will you reach those goals?

Frugal Experiments

Theresa Jones is the mom of a good-sized family, consisting of herself, her husband, four grown children, 2 high school-aged children, 1 granddaughter, one son-in-law, one daughter-in-law 1 dog 2 cats and one grandchild-to-be (Aug 2012).

She spends a good part of her day working on her blog, Frugal Experiments. It is where she writes about experimenting in frugality, book reviews, product reviews and giveaways. When she's not writing, you will find her either, reading, cooking, gardening, crocheting, studying or hanging out on facebooktwitter or google +. She is currently enrolled full-time in college, taking a certificate course in Entrepreneurship, with the intent of turning her love of blogging into a business.

 

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