Even though I’m a firm believer that goal setting should be done all year long and not just at the beginning of each year, I do love that the New Year brings somewhat of a fresh start for everyone. It’s the one time of the year when you know that everyone will be working on something that matters to them. (Even if it only lasts for a month.)
If you’re wanting to revamp your personal finances this year here’s what I recommend.
Come Up with your Goals for this Year
Long term goals are important, the problem is that after a while they fail to motivate. Instead of focusing on one ginormous goal that may take you 5-30 years to complete break that down to what you want to accomplish this year.
For instance, I have a goal of paying my mortgage off in eight years or less. (I’d much prefer it to be less.) Right now the balance is sitting around $110,000. Instead of looking at that entire balance I’ll make it a goal to pay an extra $20,000 on it in 2016. By looking at it in that smaller chunk throwing $5,000 at it once makes it seem much more exciting.
Rather than thinking I’m only taking my mortgage from $110k to $105k I can instead reframe it and think I’m already 25% of the way to my yearly goal. That sounds much nicer, doesn’t it?
By doing this I’m still working on my long term goal but can keep a steady stream of motivation.
You can apply this logic to almost any goal. Take your big goals and break them down for the year ahead. Take smaller goals and break them down into monthly or weekly steps if needed.
Re-Evaluate Income Streams
If you’ve built yourself multiple streams of income it may be time to completely reevaluate them.
I’ve personally put this off for too long because it can seem overwhelming. However, if you want to increase your income it makes sense to thoroughly look at the time and energy you put into each form of income and what it provides in return.
Evaluate your current income streams and make changes if necessary. If you don’t have any extra income consider trying something new this year. Here are ten side business ideas and another ten for your consideration.
Don’t jump on the bandwagon and do what everyone else is doing. Instead spend a good deal of time taking into consideration what changes would make the biggest difference to your family.
If you need to beef up your savings, do it. If you need to make big budget cuts, do it. If you need to pay off your debt, do it. If you need to take a trip to Italy, do it.
You’re living your life and nobody else can tell you what you need to do. Take a good look at your situation and make the hard decisions that need to be made!