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I want to be a millionaire and retire when I am in my 30’s. But how? Only through smart financial goal setting can you lay out what success means to you. To achieve it, you must define it. You have a significantly higher chance of achieving success if you come up with an idea of what success means to you through financial goal setting. In fact, your odds increase even further if you write those goals out and then come up with specific steps on how you plan to reach them.
Below are seven smart financial goals to consider for the new year. Each goal will push you towards defining what your baseline financial situation is and how you want to improve that position.
Set a Budget and Follow It.
Budgeting is finance 101 and a crucial step to determine where all of your money is going every month. If you aren’t sure where to begin, start by outlining some basic categories.
- Housing expenses (rent, mortgage, insurance)
- Utilities (water, gas, electricity)
- Food expenses – I like to break
this category into two sub categories, eating out and groceries, so I can track
how well I am doing eating cheaper meals prepared at home
- Eating out
- Groceries
- Auto expenses (gas, insurance, maintenance)
- Shopping expenses (general shopping, clothing, books, music)
- Media expenses (cable, internet, subscriptions, phone)
- Gym expenses
- Travel expenses
- Miscellaneous (gifts, one-off expenses, etc)
I recommend starting out with broad genres to get an idea of where you are generally spending money. As you get more comfortable you can begin breaking them down into more specific categories.

There are a few ways to track these expenses. You can track them the most basic way through the calendar method to give yourself a visual representation of just how many purchases you are making on a daily basis. You can enter all of your expenses on an excel spreadsheet at the end of every month. Or you can use an app like Mint or Personal Capital which connects to your bank and credit card accounts and automatically pulls in all of your purchases.
After a few months of collecting data, you will get an idea of how you are spending in each category- and realistically how much you should actually be spending. For each category, choose a financial goal that is slightly lower than what you spend on average. If you normally spend $700 a month on groceries, shoot for a $650 budget to begin with. Focusing on a budget is a must have to every financial goals list.
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Focus on Conscious Spending.
How many times are you super excited to make a purchase online, buy the item, and forget what you ordered before it even arrives? Humans thrive on instant gratification– and as our world transitions to a higher speed, instantaneous culture we become more addicted to the idea of rewarding ourselves in the moment. Hence why online shopping is everyone’s new best friend. If you want something, you can have it ordered within seconds and often times delivered to your door within a day or two.
When we make these quick purchases, all we are doing is satisfying the need for instant gratification. To combat this, focus on meaningful purchases. Think about why you want to purchase something and whether it will really add value to your life. Many times, you will realize you love the idea of an item and not necessarily the item itself.
A great strategy to test whether you truly desire a purchase is to add it to a list and wait 7 days before deciding to purchase. If you truly are interested, you will still want to buy the item. What you will find is that even after just one day you will realize you do not actually want whatever you were coveting, you were just excited to make the purchase period. This is a great strategy to cut down on impulse purchases and will help you fill your life with meaningful elements.
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Pay Off Your Debt.
If there is one thing in this world that will drag you down financially it is debt. Unfortunately, the average American has almost $40,000 in debt. Whether it be credit card, student loan, mortgages, or car loans- debt can feel like a weight that drags us to the bottom of the financial ocean. The first step to conquering debt is to make a list of all current debt including total and interest rates. To know how far you will need to dig, you have to know where you are starting from.
There are two common strategies employed when tackling debt: the high interest strategy and the snowball strategy.
The High Interest Rate Strategy
The High Interest Strategy focuses on putting all additional payment towards the debt with the highest interest. Mathematically, this makes the most sense as you are paying higher interest on this loan.
For example, if you have $10,000 in credit card debt at 15% interest. If you made $240/month payments it would take you 5 years to pay off that debt and you would end up paying almost $15,000 in total with $5,000 just in interest! However, if you had additional cash you could put towards that loan- say $100 extra per month- it would only take you a little over 3 years and you would save $2,000 in interest. Well worth it. Compare this with the same $10,000 loan at 10% interest and that extra $100 per month will only save you $1,000 over the life of that loan.

Attacking high interest debt makes the most sense mathematically, but sometimes when it comes to digging out of a debt hole it isn’t just about the numbers, motivation can play a huge factor…
The Snowball Strategy
The Snowball Strategy involves targeting your smallest dollar value loans first- paying off your $5,000 loan before your $10,000 loan regardless of the interest. This strategy can help you build momentum, ie growing your debt paying off snowball. Targeting a large loan could come off as a daunting task which can ultimately lead to a sense of hopelessness and the desire to give up. By starting with the smallest debt, it will be easier to achieve quick wins and then transfer the money you were putting towards that loan into your next smallest loan. Loan after loan payoff, the amount of money you are able to put towards the next loan grows as does confidence in achieving a debt free life and achieving your financial goals.
Have an Emergency Fund.
Most financial experts recommend having six months of monthly expenses stashed away for a rainy day. This will help you weather financial storms and not fall back into debt should hardships come your way. If six months’ worth of expenses seems like a daunting task, start with the goal of $1,000. When do you want to have that $1,000 saved by? Six months? Break the goal down even further. To save $1,000 in six months you need to save $167 per month, or about $6 per day. Search your day’s expenditures- can you save $6? Use these daily benchmarks as a way to chip away at these bigger financial goals.
Begin Tracking Your Net Worth.
How much are you really worth? For most people, the value may be surprising. Most of us have a way of convincing ourselves the purchases we are making are investments contributing to our bottom line, when in reality they are merely liabilities. An asset is an investment if it is making you money. A liability is something you pay money towards.
For the sake of simplicity, we will assume that an asset is something you could sell for money and an asset is something you owe money on. To track your net worth, start by making a list of all of your assets and your liabilities.

Assets may include real estate you own- be careful here as the value of a property is merely speculation until actually sold. You can use value estimator tools like Zillow, but use discretion when estimating the value. Assets also include balances in your checking and savings accounts, retirement accounts, and investment portfolios. Liabilities can include mortgages, auto loans, credit card debt, personal and student loans. Subtract the total of all of your assets minus the total of your liabilities and that is your net worth. Most people assume that their home is a huge asset, when in reality if most of the value is under mortgage it is actually a liability. That is not to say that owning a home is not a good idea, we just want to be aware of what we owe.
Maximize Contributions to Your Retirement Account.
Whether you have a 401(k), 457(b), Roth IRA, or any other type of retirement account, maximize what you contribute to these accounts. No matter where you are at on your financial journey, attempt to contribute enough money to your retirement account to satisfy the full company match if applicable. If your company matches retirement account contributions up to 5%, then contribute at least 5% because that is free money. Every situation will be different, and it is important to asses your own situation but make every priority you can to begin saving for your future. The power of compound interest is amazing and it is even more amazing to make money off of free money.
Improve Your Credit Score.
Our credit score is basically a financial scorecard that rates how well we have managed our money over the past seven years. The first step to improving your score is understanding what influences it. There are five major components:
- Credit Utilization
- Payment History
- New Credit
- Length of Credit History
- Types of Credit

Credit Utilization (30%)
This is the amount of money you owe on your accounts. This is recommended to be below 30% of your total credit limit.
Payment History (35% )
This is track record of how well you have made payments on debts in the past. It is recommended to minimize any late or overdue payments.
New Credit (10%)
This parameter tracks how often you are requesting potential new lines of credit and includes hard credit inquiries as well as the number of new accounts opened. It is recommended that you minimize the number of hard credit inquiries you request as well as minimize new cards opened as both will negatively affect your credit score.
Length of Credit History (15%)
This parameter tracks your average length of credit accounts. The longer you have an account open the better. This will help track people that are constantly opening and closing cards to avoid payments. It is recommended that you maintain at least one line of credit indefinitely to increase the overall length of your credit history as you open new cards.
Types of Credit (10%)
This includes all types of credit listed under your name. These include revolving credit like credit cards as well as installments like car payments. Some experts say that having a variety of different credit that you pay off regularly can help you in this category. However, it is important to take out credit only on what you need.
How Are You Scored?
How are you graded based on your credit score? There are generally 5 tiers:
- Excellent credit: 750+
- Good credit: 700-749
- Fair credit: 650-699
- Poor credit: 600-649
- Bad credit: below 600
You can pull your free credit report from a multitude of websites like Credit Karma. You may also check your credit card accounts as many of those providers also supply monthly free credit reports. Once you pull your report, analyze how you are doing in each of the five areas and develop a plan on how you will improve in each. Over time you will see your credit score slowly improve, which will help you secure lower interest rates on future loans and overall improve your financial position.
Key Smart Financial Goals
Taking any step towards improving your financial stature is important. Through these seven steps, not only will you get a better grasp on where you stand but how to improve that position. Focus on each goal and write out how you plan to complete them and you will be on your way to exceeding all of your smart financial goals.
