The following post is by MPFJ staff writer, Jeff. Jeff has been writing online about finance related issues since 2009, and after a lot of soul searching in 2015 has crystallized his goal of financial independence and blogs about his journey to freedom at zerotofi.com
Now that the New Year has come and gone, have you set any financial goals? If you did, 1 month later how are you doing on them? If you’re anything like me (and lots of other people) your motivation to pay off debt, start saving more, eat out less or anything like that is probably beginning to wane. If you’re looking for new goals or just never got around to setting some for 2016 yet, here are a few you should shoot for.
Pay off credit card debt
This is a popular one, and for good reason. Many credit cards have balances on them because of overspending or because they were used an emergency situation for a car repair or something similar. When you’re using credit cards and not paying them off in full every month, you’re racking up huge interest charges (typically >15%), making it tough to get ahead. To accomplish this you’ll need to be steadfast about not adding any new charges and trying to find any extra cent that you can use to pay above your minimum. If you have more than one card, look into the debt snowball method and see if it suits you. I was able to pay off my debt using this method in 2010, and have not carried a balance on a credit card ever since. It was certainly not easy, but looking back it has allowed me to do so many things.
Build An Emergency Savings Account
Many people get stuck with high interest credit card debt that they cant pay off because they dont have any cash for emergencies or unexpected events, like a car repair or home repair. If you find yourself in this situation, you’ll want to have a bit of money saved as a backstop so you dont return to credit card useage. While there are many plans and amounts, I think the following one would be easiest to follow, and would give you a savings balance of >1,300 by the end of 2016. You’ll be saving a certain amount of money each week, so you’ll need to find it in your budget.
Start off saving 52 the first week, then 51 the next week, then 50 and so on. By the end of the year, you’ll have a good amount saved up. Bonus part is if you get to July or August and want to save more than the required amount, just do that! A bigger savings account never hurt anyone.
At the end of the year, you should have money to help you weather most emergencies, and wont need to fall back on credit cards again.
Start a Side Hustle
If there’s one thing thing related to earning income that has changed my perspective, it is starting a side hustle. Paying off debt was an awesome feeling and very, very freeing, but being able to earn even a little bit of income on my own, outside of my day job is incredible. Just about anyone has some skills that they can trade for money in their spare time. You can mow lawns or shovel snow, fix things around the house for seniors, change oil in cars for your neighbors, help people move, start an online business and the list goes on and on. There are so many people who would rather just pay someone to deal with something than spend the 15 minutes to do it themselves! Step up and be one of those people making extra money! You can use the extra money to fund your savings account, or pay off debt!
How about you all? What money goals do you have for 2016?
Share your experiences by commenting below!
***Photo courtesy https://www.flickr.com/photos/pictures-of-money/17123254699/
