Setting Financial Goals for the New Year

It’s hard to believe the holidays are over and a new year has begun. Wasn’t it just yesterday that we were ringing in 2011? As we get back to work, back to school and back to reality, it’s a good time to start thinking of our financial goals for 2012.

This is sometimes a painful process for people. We know we may have over spent during the holidays, and we’re not ready to see exactly how much. Or, we already know we have too much debt, and we don’t think there is any way to get out of it. Maybe you haven’t been saving enough, and you’re dreading giving up something you love to put that money in savings.

Now is the time to start dealing with those feelings and taking action to make your situation better.

If debt is your major concern, you may be able to consolidate your high-interest credit cards into one low interest loan, which will help you pay down your debt faster. Sometimes just calling the credit card companies and asking for a lower interest rate helps, especially if you tell them you have an offer from another credit card to consolidate your debt at zero percent interest.

If savings is your major concern, figure out what you can give up that won’t feel like too much of a sacrifice. If you eat lunch out every day, maybe you can cut back two days a week. If you stop for coffee every day, perhaps you can buy yourself a coffee maker with a timer and get it ready the night before so you always have coffee when you wake up.

The important thing about setting goals is to be realistic. Much like dieting, if you set goals that make you feel like you are giving up too much, you’re not going to stick to them. If you have $10,000 in debt, figure out what you need to do to pay off maybe $2,000 this year. If you can, make more than the minimum payment, or consolidate your loans.

If your goal is to save more money and you’ve never done that before, don’t start by saving $100 a paycheck (unless you feel that’s comfortable for you). Start small with maybe $10 a pay check, and have it deducted automatically from your pay check and deposited to a savings account. If you find you can do more, increase that amount next month or later in the year.

Whatever your goals, take baby steps. You didn’t get into debt over night, and you won’t get out of debt every night. You didn’t spend your savings overnight, and you won’t build it back up over night. Be patient, and you’ll be amazed at how well you do.