Inevitably the start of the new year encourages us to think about where our life is going and how we can change our financial situation for the better. Personally I think each of the 365 days of the year are fresh, delicious new days to set goals and change your life but if the start of January works for you then so be it.
Knowing what you can achieve
They key to setting these goals is to find a balance between what you'd like to achieve and what you can realistically achieve. There is no point setting yourself a year long goal which, when you really think about it, without robbing a bank will take 10 years to achieve. Equally there is no point setting yourself a goal which you can complete in a week without any change to the way you think or work.
My goals as a 31 year old are significantly different to the goals I had as a newlywed at the age of 24. It took me a long time to realise just because someone I knew was saving for a deposit for a home and I was saving to afford a mere pair of second hand curtains, it probably wasn't a great injustice but a stage of life. With finances in mind it is important to set goals for you and not for others - this is about you, not about keeping up with friends, relatives or work colleagues.
If you've done all the sums, investigated every government scheme or grant and know, for instance, that buying a house or paying off a huge debt is 5 or 6 years away for you, even with mega lifestyle cut backs and a real struggle, then cut your cloth accordingly. Make your goal for the end of 2014 to be 4 years away from paying off your loan or buying that house. Be active in your actions and see your goals through to the end but don't make the goals unattainable because you'll fall off the horse at the first hurdle and struggle to get back on for years to come.
Setting your goals
Grab a piece of paper and write down 4-6 things you'd like to change about your finances by this time next year. Close your eyes and just jot down, in big bold letters, the first things that pop into your mind. Now open your eyes and see what you have on your sheet of paper. Without taking a long time to evaluate them, write down ways you can realistically get to your goal in 3 bullet points.
For example, we're already a long way into the process of saving for a home and this is the final leg, so for us one goal is brought down to the following final steps:
BUY A HOUSE
> Save legal fees
> Cut down spending on entertainment to create a contingency fund
> Sell furniture we no longer need to pay for movers
Are these realistic steps? Are they practical in moving you forward with your goal? How will reaching this goal change your life?
I like to pop a reminder in my diary for a quarterly review of my goals. I set aside an hour or so to go through my list and cross off everything I've achieved and make a few notes on what I need to do. Holding yourself accountable to the goals really helps push you forward but it also helps you realise where you need to make changes or update your goals and expectations.
And yes goals are not set in stone. Of course it isn't sensible to change your mind week after week because nothing will ever change but life happens and you can't beat yourself up if life throws a baby, redundancy, death or A N Other thing your way. Take some time out, reevaluate and take realistic steps to heading toward either the old goal or a modified goal.
- Less food waste
We're pretty strict when it comes to food waste but this year I want to make sure we move from using 90-95% of what comes into our kitchen to 100% of what comes into our kitchen. No peelings will go unused and I'll be pushing use by dates so far past their limit the limit will be a dot - a slightly misquoted Friends reference for you there, poppet.
- Buy a house
This has long been a dream but this will be the year Mr Thrifty and I put down roots. We've researched the mortgages we want, we know exactly which area we want and how flexible we're willing to be and we've saved what we need to save. We know that once we've bought a house and paid all of the associated fees our outgoings will be £300-£400 less per month.
- Weekly eBay dates
I'm going to set aside 3 hours a week to set up eBay listings and take items to the post office. I previously made a nice little side earning from selling our unwanted belongings on auction sites, so this year I'd like to see my weekly dates with eBay become a regular fixture in my life.
- Use my bike
If you've been reading A Thrifty Mrs for a while you'll know I learnt to ride a bike as a 27 year old way back in 2010 and it was a pretty big deal for me! However since moving to a slightly less bike friendly area of the city (our old area had a great system of off road cycle lanes and this area is incredibly busy and dangerous) I've barley made use of my bike, instead opting for public transport. My bike riding goal goes something like this - for the first 3 months of the year I'd like to spend some time regaining confidence with my bike in local parks and on quite routes then drop my public transport usage by 50% in favour of using my bike.
- Learn practical skills
I want to take a short, practical course which will teach me some basic skills with regards something like plumbing, woodwork or electrics. In the long run this could save us a small fortune on dealing with household problems which arise when you own a home.
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TTFN,P.S. What are your goals for 2014?
P.P.S. Happy new year!
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