It’s a new year! Time to think about goals, resolutions and bucket lists. I’m not big on New Year’s resolutions because it’s too cliche for me but I do believe in setting realistic goals that our family can focus on and meet in a practical amount of time.
Since we’re a frugal blog let’s talk about setting goals for your budget this year (or even the next 3 months) and how to put them into action. Then I’ll share with you what goals my husband and I have for our family this year.
First, start with these two steps:
:: Create a budget. You can’t achieve any financial goals if you don’t know where your money is going. Sit down. Get honest with what you spend and figure out if where your money is going is the best for you or your family. It can be on a cute budget worksheet, on the computer or a scratch piece of paper. It doesn’t matter. Just write them down.
:: Start spending cash only. It’s much harder to hand over three $20 bills than it is a slim little debit card. Yes, I agree that debit is cash, but it’s not ACTUAL cash. For those worried about carrying around cash in your wallet, I can only say that I’ve never worried about losing my wallet or having it stolen. It’s usually within 2 inches of me at all times. Not because I’m paranoid but because it’s located next to the necessary diapers I am required to carry at all times.
When you put these two steps into action it makes setting goals much simpler because you know what is happening with your money.
Now the goals. Here are the goals my husband and I have set for our family. These are very similar to Dave Ramsey and his method of Financial Peace.
:: Create a $1000 Emergency Fund (Done)
:: Pay off all debt (completed last January!)
:: Create a living expenses fund (to be fully funded by April)
:: Begin working with our investment adviser (in June) on intentional planning for retirement (we already do this but after creating our living expense fund we plan to put more money towards our retirement)
:: Save for 30% (or 40%!) down on a bigger house (hopefully moving in 3-4 years)
Having these above goals in mind for our family makes big and small financial decision making much easier. When it comes to a windfall (taxes or work bonus) we know where the money is going. When it’s deciding between overspending on our clothing budget we can ask ourselves, “Do you want the shirt now or the bigger house later?” It’s not always the house but when you have a family of 5 with one bathroom the bigger house sounds more appealing. Or at least one with 2 bathrooms.
Did you make financial goals for yourself or your family this year? How do you plan to stick with them?
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