Full Post containing all the juicy details.
This is a limited/starter list, targeted towards the casual financial individual. Please feel free to add more and/or debate.
Start a budget. A budget is the single-most important personal finance tool. It gives you knowledge of where your dollars are going. It provides you with a way to measure your personal finance. And measurement is needed before management (a.k.a. improvement) can begin. If you need ideas, I wrote an entire article using experts’ opinions on how they budget.
Create an emergency fund. What happens if the furnace breaks in mid-February? What happens if you get laid off and need a few months’ expenses to get back on your feet? These are scary questions. While there are a few different ways to prepare, the most important one is to create an emergency fund.
Plan to pay that credit card debt. A lot of us are in some form of debt…student loans, mortgages, car payments. But the most insidious form is credit card debt, because it has such a high interest rate. “Interest” means that you are burning up your money–although sometimes it can be for good reasons (e.g. further education, or a place to live).
Take full advantage of your employer’s retirement savings program. For most of you reading from the U.S.A., this would be your 401(k). But some employers use other programs, such as a 403(b), IRAs, Thrift Savings Plans, or 457s. Internationally, there are similar government-sponsored and employer-sponsored plans.
In short, all of these programs offer either a tax-advantage, an employer contribution, or both.
Re-consider your spending. This is something that anyone could do. But since you already have some of the financial basics locked down, this is an easy next step. If you go back to 2019, you could probably pick out some purchases that now seem pretty worthless. What could you do different in 2020 to prevent those worthless purchases?
Understand your portfolio. You might have money in a bank account, a retirement plan, in company stock options, in home-ownership equity…the list goes on. And within those various locations, there can be sub-categories. Where is your retirement account invested? In stocks, in bonds, or a REIT?
Outside education. This was a huge step for me. How often do you seek out knowledge when you’re confused about your personal finances?
This is a limited/starter list, targeted towards the casual financial individual. Please feel free to add more and/or debate.
Beginners Goals for 2020
Start a budget. A budget is the single-most important personal finance tool. It gives you knowledge of where your dollars are going. It provides you with a way to measure your personal finance. And measurement is needed before management (a.k.a. improvement) can begin. If you need ideas, I wrote an entire article using experts’ opinions on how they budget.
Create an emergency fund. What happens if the furnace breaks in mid-February? What happens if you get laid off and need a few months’ expenses to get back on your feet? These are scary questions. While there are a few different ways to prepare, the most important one is to create an emergency fund.
Plan to pay that credit card debt. A lot of us are in some form of debt…student loans, mortgages, car payments. But the most insidious form is credit card debt, because it has such a high interest rate. “Interest” means that you are burning up your money–although sometimes it can be for good reasons (e.g. further education, or a place to live).
Intermediate Goals for 2020
Take full advantage of your employer’s retirement savings program. For most of you reading from the U.S.A., this would be your 401(k). But some employers use other programs, such as a 403(b), IRAs, Thrift Savings Plans, or 457s. Internationally, there are similar government-sponsored and employer-sponsored plans.
In short, all of these programs offer either a tax-advantage, an employer contribution, or both.
Re-consider your spending. This is something that anyone could do. But since you already have some of the financial basics locked down, this is an easy next step. If you go back to 2019, you could probably pick out some purchases that now seem pretty worthless. What could you do different in 2020 to prevent those worthless purchases?
Expert Goals for 2020
Understand your portfolio. You might have money in a bank account, a retirement plan, in company stock options, in home-ownership equity…the list goes on. And within those various locations, there can be sub-categories. Where is your retirement account invested? In stocks, in bonds, or a REIT?
Outside education. This was a huge step for me. How often do you seek out knowledge when you’re confused about your personal finances?