Ask any wealthy investor or successful businessman and they will tell you that earning money is just one side to wealth. A stenographer or court reporter can make as much as $60,000 or $70,000 in their first year of work, but having money is only the first step. Whether your own income is far less than this, or even more, you’ve got to understand how money works and set goals for it to really master your finances.
Maybe your primary need is to increase your working income or maybe you know you need to start taking savings and investments seriously. Wherever you are on your financial journey, these ideas for financial goals are a great place to start. Keep reading to learn what some of the most important goals are to set in 2020.
Optimize Your Credit
A full 52% of all homeowners don’t fully understand their own home insurance coverage. Similarly, most Americans aren’t quite clear on the state of their credit, either, which can have a significant impact on how much you pay for things like insurance. In fact, many people are completely mystified by things like credit scores and history.
However, your credit isn’t something you can leave to chance without suffering financially. Having a high credit score is more than just a bragging right — it can give you priority access to loans, lower insurance rates, and even cost savings for everyday services like utilities, depending on your provider.
Even if you aren’t planning on buying a home or financing a car, you should prioritize your credit just to be safe. If your vehicle breaks down or you’re in a car accident — which account for 52% of personal injury lawsuits — and you have no choice but to get a new one, you’ll need good credit to get a loan for it. Having good credit can also benefit you if you need a credit card for unexpected expenses.
Shop Smart, Especially Online
According to a 2018 study by the National Telecommunications and Information Administration, nearly 50% of internet users in the United States avoid online activities expressly due to privacy and security concerns. While concerns about identity theft shouldn’t keep you living in fear, you should definitely avoid sharing your personal information or making purchases on websites you aren’t 100% sure are safe. If your credit card information (or worse, your debit or bank account details) gets into the wrong hands, you could wake up to find your accounts drained or filled with life-altering debt.
Besides taking precautions to avoid costly identity theft, you should be careful when shopping to avoid spending too much money on unnecessary things. Many people find shopping to be a therapeutic experience, or enjoy a sort of “high” after an impulse purchase. This is especially risky online, where items can be ordered with a single click of a button. The internet offers a treasure trove of items to buy, from collector Cobras made by Carroll Shelby to cheap jeans and tops that fill out your wardrobe. In an instant, you can purchase almost anything you want online, which can lead to serious overspending.
If this describes you, you should absolutely find other avenues for finding relaxation and enjoyment and stick to a budget to guide your spending.
Cut Costs on Everyday Fees and Expenses
Most people spend money needlessly every day, just because they haven’t taken any time to optimize their spending. Whether grocery shopping, paying for insurance and utilities, or using subscription services, there are almost always steps you can take to spend less and get more value for your money.
For example, just by installing and using a programmable thermostat in your home, you might save around $180 per year on your electric bill. Instead of automatically buying the same groceries every week, you could save by hunting for deals or coupons for 20 minutes before shopping. And if you have a streaming service subscription that you only use for one or two shows that you like, you could turn off automatic renewal and only subscribe again when you’re in the mood to watch them.
If you have paid-for bank accounts or credit cards, you could call these institutions and request fee-free services, or do your banking elsewhere. If you haven’t checked in with your insurance provider in a while, you could call them to see about opportunities for getting your rates lowered.
Whether you make phone calls to your service companies or do your own research before buying, simple considerations like these can dramatically lower what you spend every year.
Pay Off Debts
If you have thousands of dollars in debt from purchases or student loans, or if you have credit cards you only pay minimum payments on, you may have a debt problem (or will very soon). In the personal finance world, debt hangs like a cloud over many individuals and families: dark, ominous, and anxiety-inducing. Besides this, having a lot of debt can cause you to be financially crippled in the face of major money decisions, such as the prospect of buying a home or car.
If you have a lot of debt, or even only a little that you want to get under control right away, make 2020 the year you take back control. See what expenses you can cut, or what sources of income you might add, to put more towards paying down your debts. Some people go as far as to sell their current house and downsize while they pay off debts. If you’ve tried selling your home before and it didn’t work, take heart: 50% of homes in the DC Metro market didn’t sell the first time they were listed. If selling your current home has been one of your goals for a while, maybe this could be the year you do that.