This post is part of our series 7 Weeks to Your Best Finances.
This series is meant to serve as a 7-week path to improving your finances. It will cover all the important topics like starting a budget, saving money, making money, investing, and more.
To find out more and see all the tips and ideas for improving your finances check out the dedicated 7 Weeks to Your Best Finances page.
With the start of the new year, now is the perfect time to reevaluate your financial goals. Have you started thinking about what you want to achieve financially this year?
There are so many steps you can take to improve your finances, no matter if you are deep in debt or if you have millions saved up. We all have room for improvement and we should never fail to set financial goals for ourselves.
Take the start of the year to commit to improving your finances drastically. No matter what stage you’re in, here are 15 personal finance goals to consider.
1) Educate Yourself About Money
Perhaps one of the best things you can do for yourself financially is to educate yourself about money.
Gaining knowledge is the best decision you can make. We all know the basics of finances – debt is bad, credit cards can be either very useful or very dangerous, and you need to save for the future. But taking time to educate yourself will help you to make the best financial decisions for you and your family.
The good news is that there are thousands of resources at your disposal. You don’t need to go get a finance degree to understand money. You can read some of the hundreds of personal finance blogs out there and read some of these personal finance books to get you started.
2) Spend Less
Take a look at your budget and compare it to what you actually spend in a month. Are there things you can cut out? The more spending you can eliminate, the faster you can pay off debt or build a savings.
You have to get creative and in depth with how you can save. Can you cut cable and other subscription services? Shop around for cheaper car insurance? Go out to eat less? Figure out how you can spend less and commit to it.
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3) Track Your Credit Score
For some people, tracking their credit score doesn’t even cross their mind. If you don’t already track it, this is the year to start.
The biggest reason to track your credit score and report is to make sure no one is stealing your identity. You want to check it a few times a year to make sure there are no false claims on there that are hurting your score.
The best news is that you can check your credit score for free.
You are entitled to a free copy from each credit-reporting bureau, each year. Read this post to find out how you can get your credit reports.
4) Improve Your Credit Score
What does your credit score look like now that you’ve checked it? If you’ve never borrowed money, you may not even have a credit score.
A credit score is important for a variety of reasons. If you ever need a loan (like a mortgage or car loan), or even services like cable and internet, they will check your credit score. And why? People want to know that you can actually pay them for what you owe.
The better your credit score, the better rates you will get from lenders. So it is important to have a high score. Credit scores range from 300(low)-850(high). Here is a detailed post of exactly how to improve your credit score.
5) Become Debt-Free
Becoming debt-free might not be something you can accomplish this month, or even in the next few years, but the more debt you have, the higher of a priority it should be to get it paid off.
Think about what your life would look like without the weight of debt. You wouldn’t owe anyone anything. Your money is strictly yours and you choose what to do with it.
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6) Plan to Avoid Future Debt
If you are already debt-free, how can you stay like that?
Look ahead to the future. What will you be needing to save for? Will you need a new car in a few years? A house? Plan to go to graduate school?
Map out a plan to figure out how you will be able to afford things in the future. Remember, taking on debt is not an option!
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7) Make More Money
No matter where you are on your financial journey, it never hurts to have extra money. Think about how you could make extra cash to supplement your income.
Any extra income you make will bolster your financial goals. Make it a goal to earn more money this year and see how much extra you can make!
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8) Bulk Up Your Emergency Fund
A healthy emergency fund is imperative for financial success. Why? Because it covers you in times of trouble and prevents you from taking on major debt.
Can you imagine losing your job? Totaling your car? Having major medical expenses? How would you pay for that?
In tragic times, the last thing you want to worry about is money. So take this year to bulk up your emergency fund to a level where you are comfortable. Build it up to a level where you feel comfortable. If you’re just starting out, a small $1000 emergency fund will help you immensely. Ideally, you would want to get to the point where you could cover 3-5 months of living expenses (at least) should something bad happen.
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9) Build Your Retirement Account
Everyone is at a different stage of saving for retirement. Some of us are trying to balance saving for retirement with paying off debt. While others of us have been saving heavily for retirement for a while.
Take time to really evaluate your retirement account. Compare where you are currently to where you want to be. Are you in the best retirement program available to you? Commit to throwing any extra money you make this year into your retirement savings.
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10) Review Your Insurance
Is your insurance still the best fit for you and your family’s needs? Could you potentially save more money by switching insurance?
Insurance is something we can easily forget until we need it. Many people see the cost of insurance and simply go with the cheapest option, which is probably not enough to cover them should something bad happen.
There is no secret formula to tell you what you should purchase for health, car, rental, homeowners, life, or any other type of insurance. You need to evaluate your needs. If you are trying to spend less on insurance, do you have a plan of how to pay for a tragedy?
Insurance isn’t cheap, but it is worth the peace of mind it provides. Shop around for the best options and prices for your family.
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11) Decide How to Give Back
Many of us are organized financially until it comes to giving. Or we are afraid to give away the money we worked so hard for.
No matter your situation, someone else is struggling worse than you. Giving back is a major way to make a difference with your money.
Instead of haphazardly giving this year, come up with a plan. What organizations or groups do you want to give to? How much? Or what will you donate?
When you plan your giving, you not only will make a bigger impact on those you are giving to, but you will also protect your finances from any unexpected expenses.
12) Start a No-Spend Challenge
Want to really push yourself this year? Try a no-spend challenge.
A no-spend challenge is just what is sounds like. You avoid spending any money you don’t have to. This means no extra clothes, no social events, or eating out.
This is extremely challenging, but very effective. You’ll realize how little money you actually need to get by.
If that seems too intense for you, try applying a no-spend challenge to one area of your life. If you shop a lot, try a shopping ban. If you eat out frequently, vow to only cook from home.
Downsizing your belongings might not save you any money immediately, but it forces a lifestyle change that will save you so much in the long run.
Think about everything you own. How much did you spend on it? Do you have to pay to maintain it?
If you don’t truly enjoy everything around you, then it’s time to go. By embracing a more minimal and simpler life, you’ll save money and think twice while making a major purchase. As a bonus, you can sell those extra things laying around for some cash!
20 Easy Ways Millennials Can Practice Minimalism
14) Perfect Your Professional Skills
By improving your professional skills, you aren’t just improving your work, but you are improving your finances.
Continue to develop the technical and personal skills you need at work. Because the harder you work, the more potential you have to earn more money. And not only that, but many of these skills translate into your personal life.
For example, if you are a skilled negotiator, you have the potential be able to save hundreds, if not more, money per year by haggling. If you work at your organizational skills in your work life, that can also improve your personal finances.
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15) Set Your Long-Term Goals
There are so many financial goals that we want to achieve now. But what are your long-term financial goals? Every financial decision you make will impact your financial future, so it’s important to know what your long-term goals are.
Maybe you want to retire by 50. Or maybe you want to start a large family. Want to go back to school? Or travel the world? Your long-term financial goals should be big enough to keep you motivated on your financial journey.
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Make this year a great one by committing to improve your finances, whether it’s one thing or everything on this list. Keep in mind your long-term goals to motivate yourself in the process!