It’s 2020, and that means many of us are writing our New Year’s resolutions and goals for the coming year. So, we wanted to outline ten financial goals you should keep for all of 2020 – and beyond!
- Start saving
Without a solid savings account in case of a rainy day, our finances really aren’t on solid ground. But surveys show that about 40% of Americans couldn’t come up with $400 today in case of an emergency! So, this year, make sure you save 3-6 months’ worth of expenses from the get-go.
- Start saving automatically
Not only should we save, but the key is to save automatically; that is, have a certain portion of your paycheck (10% is a great place to start) automatically deducted from your paycheck. Arrange for it to be sent to a dedicated savings account (with no ATM card) before the rest of your income hits your account. You won’t even miss it, but your savings will grow on auto-pilot!
Every person should invest for the future in the form of stocks, mutual funds, etc., no matter how big or small the sums you start with. The magic of compounding means that your money will grow exponentially over the years and decades no matter what the markets do, but the key is to invest as early as possible and consistently!
- Pay down debt
The landslide of debt facing American consumers is now the most pressing financial concern. Not only has credit card debt risen precipitously in past years, but student loans are at endemic levels, medical debt is at an all-time high, and even auto loans are out of control. Commit to paying down your debt this year because a dollar saved (in interest) is like two dollars earned!
- Increase your credit score
Keeping a solid credit score is essential in 2020 if you want to put your financial house in order. Not only does a good FICO mean you’ll get the best possible interest rates, credit card terms, and loans, but everything from insurance premiums to rental terms and even some job offers are tied to credit scores!
Even more important is the need to stay vigilant when it comes to ID theft and data hacks, which will be at an all-time high in 2020. A great credit score can save you money in so many ways!
- Buy a home
Are you still renting? Your list of financial New Year’s resolutions should include becoming a homeowner, as the average net worth of homeowners is about 13 times higher than that of renters. When you rent, you’re only paying your landlord’s mortgage, so why not pay your own this year?!
- Or pay off your mortgage faster
And if you already own a home, commit to paying extra towards your mortgage principal every month. Take a look at the math some time on one of the free mortgage calculators because it really saves you exponential sums down the road.
- Think before you buy!
So, you’re supposed to save, pay off debt, and start investing more in 2020. Where will all of this “extra” month come from? Well, you’re probably already spending it elsewhere, such as in unnecessary bank fees, interest payouts, impulse purchase, and a host of other items on your budget. BY tracking your real expenditures and forming a budget (and sticking to it), you’ll be able to reallocate this “found” money for your own good!
- Track your budget
Most people think they are spending a certain amount every month, but in reality, the small everyday purchases add up to some really significant coin. Instead of just putting a budget on paper, I propose that you record each and every time you spent even one penny, whether online, through checks, or in cash, for 30 days. (There are plenty of programs that can help.) Add it all up at the end of the month and you’ll probably be shocked how much you really spent!
- Educate yourself
No matter who you are, what your situation, or how busy your life, there is no good excuse why you shouldn’t be educating yourself to improve your financial future. There are almost unlimited books, guides, videos, podcasts, and other resources to help you get in a better financial situation. Knowledge = power!