Ready to set some goals this coming New Year?
We are sharing a list of must do money goals you can set to have a head start for 2021. Take note of the money goal examples below and set yourself to a better, wealthier year!
Create and follow a monthly budget
A budget is an estimate of your income and expenses for a set period of time. It is one of the core foundations of financial stewardship. Learning how to budget your money wisely will ensure that you will always have money for the things that matters. It will keep you out of debt and/or help you work your way of a debt-free lifestyle.
Dave Ramsey, American radio host, author, and businessman once said, “A budget is telling your money where to go instead of wondering where it went.” This is the exact reason why budgeting should be one of your money goals for the new year.
Pay off your debts
Being in debt can be a frustrating feeling. It is also a serious threat to your financial security and keeps you from making the most out of your hard-earned money. One of the best money moves you can do toward financial freedom is paying off your outstanding debts.
Find ways you can slowly but surely pay off your debts. It starts with figuring out how much you owe and what method you can use to pay.
There are two well-known repayment plans you can choose from – Debt Avalanche and Debt Snowball. In Debt Avalanche, you will pay off debts that have the highest interest rate first. On the other hand, Debt Snowball prioritizes those debts with the smallest interest rate first.
Once you become debt free, you will have more room for savings and investments in your budget.
Establish an Emergency Fund
Emergency Fund refers to 3-6 months’ worth of your monthly expenses used to cover for unexpected and emergency situations. This includes job loss, accidents, sudden death in the family, natural disaster, etc. It also promotes peace of mind knowing you are financially secured in case things go out of hand.
Your emergency fund will help cover for you, so you won’t go on debt. If there’s one money goal for the new year you should get serious with, that’s establishing an emergency fund.
Increase your Financial Knowledge
It’s important to increase your financial knowledge. Learning the secrets to making financial investments will help you become braver and lessen your worries when you start investing.
Reading financial books or personal finance blogs are great sources of knowledge. You can also attend financial literacy seminars for free. Below is a list of must-read money books for beginners:
· The Total Money Makeover by Dave Ramsey
· Rich Dad, Poor Dad by Robert Kiyosaki
· Grow Rich While You Sleep by Ben Sweetland
· The Millionaire Next Door by Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D.
· Your Money or Your Life by Vicki Robin and Joe Dominguez
· You are a Badass at Making Money by Jen Sincero
· Thinking Fast and Slow by Daniel Kahneman
· Secrets of the Millionaire Mind by T. Harv Eker
Did you know?
First Metro Asset’s mission has always been bridging the financial literacy gap in the Philippines. We hold webinars that will help you increase your financial knowledge. Follow us First Metro Asset on Facebook so you can get updated on our future webinars.
Cut unnecessary expenses
Cutting expenses can be challenging but it can also change your finances drastically. Look over your expenses this year and review where you can ruthlessly cut off. What fixed and/or variable expenses can you let go to allow yourself to save and invest for the future. It can be a subscription you have not used that much or vices such as alcohol, cigarette and gambling.
Grow your net worth
Net worth is the difference between your assets (everything you own) vs. your liabilities (everything you owe). Net worth is an important number to keep in mind to know how healthy you are financially.
Calculating your net worth is as simple as its definition. Simply take note of every asset you have at the moment that has monetary value such as your house, cash on hand, investment accounts, etc. and total these numbers.
Then, make a list of your debts from personal loans, credit card balances, mortgage and so forth. Once you have your total assets and total liabilities in place, subtract it. What’s left is your current net worth.
As a new year starts, make it a goal to increase this number. Work your way to have more assets that will help put yourself firmly on the path of financial freedom.
Invest in mutual fund and build your wealth
Mutual Fund is a great choice for those who are just new to investing. If you are entering the new year with zero knowledge about investing, why not learn more about what mutual fund is and how it works.
In mutual fund investing, money from various investors is pooled together in a specific fund that aims to achieve a specific investment goal.
For as little as Php 5000 you can now invest in an equity, fixed income, balanced or money market fund with us. If you are interested in passive investing, we have index funds which suit best for you.
Remember that building wealth does not happen overnight. Use time as your ally and choose to invest as part of your money goals for the new year.