in

Finding Financial Freedom: 10 Financial Goals to Set This Year

The odds of winning the Mega Millions jackpot are 1 in 302.6 million. This makes hoping you win the lottery a terrible financial strategy.

If you are like most Americans, your financial situation could use some help. Why not make 2019 the year you get financially independent.

To get started you need to set some financial goals for yourself. As you work through this list of 10 tips, write down your own list of specific goals. You are 42% more likely to achieve your goals when you write them down.

So let’s not delay any longer, let’s get to the tips and get you financially independent in 2019.

1. Create an Emergency Fund

What happens if an unexpected bill hits and you don’t have any savings to cover it? This could spell financial ruin for you and your family. You aren’t alone either, 6 out of 10 Americans have less than $500 in savings.

Look to cut daily small spending and put that money into a savings account. Cut your spending on things like coffee, alcohol, and going out to lunch.

Aim to save $100, then up your goal to $500, then to $1,000. Your end goal should be to have at least three months’ worth of expenses covered.

2. Pay off Your Debt

Being in debt is going to sabotage your financial freedom. Only making the minimum payment will trap you in an endless treadmill of interest and an increasing balance.

Ignoring debt will only cause it to increase and make the situation worse. Ignore it long enough, and you’ll be so deep in debt you’ll have to declare bankruptcy and ruin your credit score.

3. Create a Budget

We know, no one wants to sit down and create and budget. There is a simple way to get started creating your budget though. Go with the 50/20/30 rule.

50% of your spending should be for essential things like utilities, rent, and transportation. Then 20% of your spending should go towards your financial goals.

The final 30% should go towards your flexible and changing expenses. Things that fall into this category are shopping, hobbies, gas, entertainment, and groceries.

Think of it as dividing your spending into needs, finance, and wants. The key to success is to be realistic about your spending. It is better to overestimate your essentials.

4. Wait on the Big Purchases

Wait on making any big purchases until you have your finances sorted. You don’t want to add to the financial mess until you have your current financial situation sorted out.

Accept that you don’t need the latest iPhone while your current one works just fine. Don’t go out and buy a new car with a large car payment while your current car runs great.

Before you make any large purchase, ask yourself if you “need” or “want” that particular item. Most of the time, you will find that you want the item.

Spending Fast

While you’re avoiding making big purchases, consider doing a spending fast. Create a list of everything you need in a month. Then go back and edit your list because you’ve probably added a few things that you want but don’t need.

Now create a list of wants. These will be your bonuses or rewards.

During the month, only spend money on your needs. If you make it through the whole month only spending money on your needs then reward yourself with a bonus. Just keep your bonus reasonable, you don’t want to blow all of your hard work saving on your bonus spend.

5. What’s Your Credit Score?

Being financially independent leads to a good credit score, and having a good credit score can help you become financially independent. That’s right; it’s a bit circular in logic.

If you have a strong credit score, you have more negotiating power to get a better interest rate and loan terms. This will save you money in the long run.

Being financially responsible will automatically raise your credit score without you having to do extra work. So they work hand in hand to improve.

Things to Jump Start Improving Your Credit Score

The first thing you can do is lower your credit utilization ratio. This is how much credit you are using as compared to how much is available to you.

Debt to Credit Ratio

So if you have a credit limit of $10,000 on your credit card and you have a balance of $2,000 then you have a debt to credit ratio of 20%.

The best ratio is to be at 0. But this would mean you aren’t using any credit. A good goal is to have your ratio be below 30%.

If you can’t pay a chunk of your debt off to lower the ratio, ask to raise the limit on your cards. The point here is to raise your limit, but not spend any more. You want to lower the ratio by increasing the amount of credit available to you.

Fix Errors

Take a good look at your credit report and look for any errors. You may find that there are things on your credit report that if corrected will improve your credit score.

6. Accurately Record Everything

There is no way for you to know your financial situation without recording everything. You need to track your spending so that you know what you spend your money on.

This allows you to look at the list and make decisions on what can be cut. Just like with food, we forget what we spend our money on. By keeping an accurate spending diary, you can see how much you’re really spending.

Take for example your daily cup of coffee on the way to work for $2.59. That’s five days a week for four weeks.

You end up spending $51.80 a month on coffee. That’s $621.60 a year. Instead, you could start making coffee at home and use that money to pay off your debt faster or build your emergency fund.

7. Stop Wasting Utilities

It’s a running joke, right? The dad that is always telling his kids to turn off lights, or yelling about who messed with the thermostat. Sure, it’s easy to laugh at, but there is some financial truth behind it.

Turn off lights and fans when you leave a room. If you aren’t in the room, then you don’t need to be spending money on unused utilities.

Look at the temperature that you keep your thermostat at. You can save a lot by adjusting the temperature by a few degrees.

Look at your cable, stop spending money on unnecessary channels like the premium movie and sports channels.

8. What’s Your Side Hustle?

If you find yourself struggling even with all of your savings efforts, then it may be time to create a side hustle. You aren’t alone, 44 million Americans have a side hustle.

This isn’t making a few dollars at a weekend garage sale. This is creating an average of an extra $500 a month.

Take a look at your hobbies and skills. If you are crafty, you can start selling your creations online or locally. Or maybe you have a skill that you can sell as a service to others.

Even if you can pay all of your bills, a side hustle may help you by giving you extra funds to save and invest. If you generate an extra $500 a month, that’s an extra $6,000 a year.

9. Trim Your Food Bill

One of the top things people waste money on is their food bill. You can get creative how you save money by evaluating your weekly grocery bill.

Start by making a list of what you need before you go to the grocery store. Then stick to your list while you are there.

Never go grocery shopping when you are hungry. You will make emotional and hunger driven purchases. These buys are almost always things you don’t need.

It can also help to plan out your meals. That way you know what food you need to make your meals for the week.

10. Talk to a Pro

Once you have a nest egg of savings, you need to start putting that money to work for you. Wealth management is when you talk to a professional who can help you manage your money.

They will help you create a solid estate and succession plan for your money. They will also help you protect your assets, make smart investments, and plan for taxes.

Achieve Your Financial Goals

Creating your financial goals for 2019 requires you to sit down and create realistic actionable goals. Don’t try to achieve the world right away.

Take small steps and goals that you can achieve. Then when you achieve those goals, create your next set of goals. Before you know it, you’ll be financially independent and no longer stressed about how you will pay your bills.

Struggling to get your finances in order? It may be time to get the help of an accountant.

Go Wireless! 10 Reasons Why You Should Cut Back on Your Screen Time

High-Speed Only: What to Look for in a Top-Tier Business Internet Provider