How to Fulfill Financial Goals in 2019 as a Personal Finance Manager
Today we have a special guest post from Good Nelly! We are excited to share her post on being a personal finance manager. I believe this post has many actionable tips for anyone to implement right away in their journey.
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Author’s Bio: Good Nelly is a financial writer who lives in Milwaukee, Wisconsin. She started her financial journey in 2007. Good Nelly has been associated with Debtconsolidationcare.com for 9 years. Through her writing, she has helped people overcome their debt problems and has solved personal finance related queries. She has also written for some other websites/blogs like Camp Fire Finance, XRAYVSN, Diana On A Dime, Peerless Money Mentor, and more. You can contact her at: [email protected].
Achieving your financial goals usually requires a little more effort than just sheer luck.
It will also take a lot of courage, dedication, discipline, and sacrifice to set up short-term as well as long-term financial goals, along with managing your finances.
As per a few recent statistics, 42 percent of the common people have achieved their financial goals by preparing a simple list. By having a clear financial mindset and setting realistic financial goals, you have the opportunity to become a perfect personal finance manager in 2019.
If you are facing issues on managing personal finances or you simply want to find ways to save more money, you may first set up your prime personal financial goals for 2019. You should make a list of those goals that you need to fulfill in the coming year.
Financial goal 1: Set a budget for 2019
Create a budget of your own and prepare a net worth statement. It may help you to build your financial plans and stay on track. There are a few steps involved in this process:
a) Create a personal budget – Make sure you create a high-level budget to manage your money. You must determine how much money you’re putting away after paying off taxes, how much money you’re spending from there, and how much money you are putting away in savings.
Use a spreadsheet to track your spending for 30 days. Calculate how much money you require to meet your fixed monthly costs and how much money you can use for other goals. If you have a plan for a big expense soon, like college tuition or home renovation, increase the amount of savings and consider that money as expenses.
b) Calculate your personal net worth – You should prepare a list of your assets and your liabilities. You should subtract your liabilities from your assets; this way you can get your net worth. If you’re retired, you should prepare a regular income plan and a strategy to keep your net worth intact. You may consider saving 12 months of living expenses and investing it in short-term CDs after you become eligible for the non-portfolio income such as Social Security or income from the pension. Allocating money in different short-term investment may actually help you to grow your net worth, as investments are considered assets.
c) Create an emergency fund – If you aren’t retired, you may invest your money for creating an emergency fund with three to six months’ worth of expenses for living. The emergency fund may help you cover sudden important expenses so that you don’t have to lose any of your assets or break other investment funds.
Financial goal 2: Manage your debts
Having debts can be good and bad. If you lose control of your expenses and spend too much for unimportant subjects, you may fall into a deep level of debt. However, if you prepare and follow some get out of debt strategies, you can actually eliminate your debts with ease. Here’s how to stay in charge of your debts:
a) Eliminate high-cost debts – First, you should target your credit card debt and pay it off as soon as possible. If you already own a car, try to avoid buying a new one (don’t take out a car loan). If you have multiple debts (unsecured) like payday loans, utility bills, medical bills, credit card bills, etc., then you might consider debt consolidation options to consolidate your debts into one monthly payment. This way you can reduce the cost of debts by lowering the interest rate.
b) Match your loan repayment terms with the time – This should be cleared a bit! If you’d like to move from a house within four to six years, you may opt for an adjustable-rate mortgage (ARM) or a shorter-maturity loan. If you want to live in your home for longer, or cannot cope with the ever-changing mortgage rates, you can go for the fixed rate mortgage (FRM).
Financial goal 3: Optimize your investment portfolio
Getting a better investment result is one of our prime financial goals. To achieve that result, you must create a plan on how to invest, where to invest, and for how long. Here are some investment ideas that may help you to stay focused on your investment goals.
a) Focus on total investment mix – You must decide how you invest and where to invest. You should have a targeted investment mix. That means you should have stocks, bonds, and cash proportionately distributed in your portfolio. The various investments in your portfolio should have synced with your long-term goals and time frame.
b) Choose tax-efficient investments – Municipal bonds and ETFs are relatively tax-inefficient investments, so focus on tax-advantaged accounts like traditional retirement accounts or Roth Individual Retirement Account (IRA).
c) Monitor and rebalance your investment portfolio – You must check and evaluate your investment portfolio twice every year. It may happen that your previous investment strategy didn’t work properly. This time, you might need to make amendments in your investment strategies, per your requirements. This way you can achieve long-term investment goals and stay one step ahead of becoming a great personal finance manager and working towards achieving financial independence.
Financial goal 4: Improve your credit score
One of the most important financial goals is improving your credit score.
Trust me! It is not as hard as it seems. But it’ll require a hell of a patience level to achieve this financial goal. Here are the steps:
a) Get your free credit report – You can get an idea of your credit score by checking it for free. You can get it from any of the three major credit bureaus.
b) Find ways to raise your score – Pay off a big chunk of your credit dues and reduce your utilization ratio. You may also ask your credit card company for a credit limit raise; it’ll also reduce your credit utilization ratio.
You should also focus on correcting your credit report errors. Per the FTC, nearly 20 percent of Americans have errors in their credit reports.
If possible, join an existing account of another cardholder. Ask a family members or friend who has credit cards with long credit history and good credit limits. Joining both of your credit limits can reduce your credit utilization ratio and may give your credit score a boost.
By jotting down these four main financial goals, you can establish yourself as a potential personal finance manager. Follow this path in 2019, and achieve financial success to such extent that people will follow in your footsteps, whenever they have doubts about how to manage finances.
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