Improving your finances is a common New Year’s resolution, but many people struggle to achieve their goals. Research from October 2023 found that although 72% of 27 to 34-year-olds have financial goals, 33% are falling behind.
The key to success is setting SMART goals: specific, measurable, achievable, relevant, and time-bound. Vague goals like “spend less” or “save more” won’t cut it.
Here are five simple goals to help you shape up your finances this year:
- Review your spending: Take a look at your bank and credit card statements from the past year. It’s like a “Spotify Wrapped” for your finances. Understanding where your money goes is the first step to better spending habits.
- Budget your money: Budgeting isn’t just about restriction; it’s a tool to prioritize spending on what matters most to you. Make a budget that matches your income and goals, covering essentials like insurance, rent or mortgage, and regular bills.
- Tackle your debts: If holiday spending left you with credit card debt, it’s time to make a plan to pay it off. Break down what you owe into manageable chunks and consider strategies like the snowball method to stay motivated.
- Start saving regularly: Set up automatic transfers to a high-interest savings account. Savings not only provide a safety net for emergencies but also help you achieve long-term goals like buying a house or going on vacation.
- Boost your financial knowledge: Commit to learning more about managing money. Check your super account regularly, subscribe to financial newsletters or podcasts, and seek out credible sources like the Moneysmart website for reliable advice and tools.
By setting clear goals and taking practical steps, you can take control of your finances and work towards a brighter financial future.