02 Jan What are Your Financial Goals in 2017
Taking better care of finances and saving money is probably on most people’s resolutions for 2017. The first step to successfully keeping your finances in check this year is setting financial goals. However, these goals need to be realistic; wanting to buy a Lamborghini one day is a dream rather than a goal (for most people at least). Here are a few tips for setting realistic financial goals for 2017.
Pay off debt
Student loan and credit card debt are becoming increasingly common among both young and older generations. Getting yourself out of debt is key to maintaining good credit, which it is necessary to have if you need a loan or plan on buying a house one day. You may want to consider refinancing your debt, which can lower your interest rate and monthly payments.
Start an emergency fund
It’s always a good idea to have something to fall back on in case of emergency or unexpected financial hardship. Not only will an emergency fund help you in times of financial difficulty, it will also give you peace of mind in the meantime. While young people may not think building an emergency fund is a necessary short term goal, you will be better off in the event of an emergency. Set aside part of your monthly income, or put in any spare funds you come across into an emergency account, and you’ll be safe when unexpected hardships come your way.
Save for retirement
Many people, especially recent graduates and young professionals, underestimate the importance of saving for retirement. The earlier you begin saving for retirement, the more your interest compounds over the years, and the earlier you can retire. If your company offers a retirement savings plan, sign up as soon as possible. However, there are alternatives to employer packages, with plans available from the IRA or Roth IRA. Contribute as much money as reasonably possible every month to put yourself in the best position in the future.
Improve your credit
Good credit is extremely important when it comes to staying financially secure. Maintaining a good credit score involves staying out of debt, paying bills on time, and eliminating credit card balances. Your credit will impact your ability to rent an apartment, buy a home, or receive a loan in the future. Sites like Credit Karma can help you keep track of your credit score, and set bill payment reminders to stay up to date on your payments.
Divide goals into the short, medium, and long term
While each of the goals above are important, it is impossible to tackle them all at once. You should worry about the here and now before trying to tackle any long-term goals. Your list of short term goals should include tasks like paying your rent, making car and health insurance payments, and any other necessary monthly payments. Perhaps your goal for 2017 could be to pay all of those monthly payments on time. The short term list should also include goals you hope to accomplish within the next year, such as paying off credit card debts or student loans or setting up an emergency savings fund. Medium term goals are goals you want to accomplish in the next five years, and long term in the next five plus years. Goals in these categories might include saving up for a new car, buying a house, or setting up a retirement fund. While it may not be the most fun way to use your money, beginning to save for retirement as early as possible should always be a long term goal.
By setting and following these financial goals in 2017, you can set yourself up to be financially healthy for many years to come! Contact the Bank of the Lowcountry if you have any questions about setting up a savings account or how you can achieve these goals.