Implementing new financial practices at the beginning of the year is a great idea in theory. In practice, trying to overhaul your finances all at once might be too much. You don’t want to attack your finances with vigor on January 1 and then wear yourself out by January 10. Instead, you want to slowly but surely make a long-term plan you can actually stick to.
Here are 12 financial goals to focus on in 2018—one for every month of the year. You don’t actually have to do one in January, one in February, and so on. The point is, these are 12 crucial financial goals that deserve your attention in 2018. You don’t need to get to them all in the first week, but if you get to all the applicable goals by the end of 2018, you will have made great strides in your financial life.
1. Set a personal savings goal for the year. Don’t just pick an ambiguous number. Look at how much you’re making, what your expenses are, and determine how much you could realistically save each month. You should have both a monthly and yearly savings goal, and ideally they should align.
2. Solidify your emergency fund. If you don’t already have a rainy day fund, this should be the first savings goal on your list. This can sync up with your personal savings goal; Your emergency fund should have enough to cover three to six months of your expenses. That includes all of your living expenses, and the expenses of any dependents you have.
3. Get your retirement accounts in order. If you don’t have a 401(k) or an IRA, that should take priority in 2018. If your company offers a 401(k) and matches what you put in up to a certain amount, that’s what you should sign up for. On the other hand, for independent contractors, you likely won’t be offered a 401(k), in which case you should open an IRA. The best-case scenario is to max out these accounts; The maximum for a 401(k) is up to $18,500 for 2018, and it’s $5,500 for an IRA.
4. Plan a budget-friendly trip. If you’re just starting to gain financial independence, and are wondering when the fun part of it kicks in, you’re in luck. Booking travel, and realizing you can afford more than you think now that you’ve got some savings, is a huge treat. Start thinking about where you might want to go in 2018, and how to get there.
5. Track your expenses. If you don’t know how much you spend in a month, that will seriously hinder your ability to budget. That’s why tracking your expenses is so crucial. First, you’ll want to keep track of what you spend in a month on rent, utilities, and other bills. Then you’ll need to figure out what you spend on eating out, alcohol, coffee, entertainment, and any other major spending categories.