5 Stretch Money Goals for Creating Wealth in 2017

money goals

If you’re ready to go big or go home with your money goals this year, then stretch goals are for you.

By definition, stretch goals are harder to achieve. And although they require intense focus and work to achieve, they also come with bigger rewards.

Setting a financial stretch goal can help you challenge yourself to do more with your money. It can also lead to quick results, like creating wealth and increasing your net worth by thousands of dollars in a short amount of time.

How to set stretch money goals

If you’re the kind of person motivated by big possibilities for creating wealth, a stretch money goal can help you reach further this year.

When setting stretch money goals, first identify the area of your finances where you want to see the most improvement. It could be paying off debts, saving more, boosting your investments or your income.

Whatever you choose, you’ll aim for the biggest long-term benefits from goals that will boost your net worth.

From there, figure out what would be a “realistic” goal, based on your budget. This is a goal you feel you could achieve with few changes to your current money management or habits.

Now you’re ready to figure out your stretch goal. It can be tied to your realistic money goals, such as trying to save 50 percent more each month. Or it can be based more on your dreams and ideal situation, like saving enough to finally start a business.

Unlike the practical goal, it’ll probably take big changes, self-discipline, and efficient habits to accomplish. But working toward a stretch goal can help you overhaul your finances and make big money moves in a short time.

Here’s a look at some money goals you can set to challenge yourself and create wealth in 2017 and beyond.

1. Double your retirement account contributions

The average retirement account contribution for employees in 2013 was 6.8 percent of annual pay, according to the Plan Sponsor Council of America.

However, most financial experts recommend saving 10-15 percent of income for retirement. To do so, most people would need to at least double their retirement account contributions, if not more.

To achieve this stretch goal, you can go all out and double your 401k contributions on day one. Just make sure you’re adjusting your spending down to account for the amount that’ll be missing from your paychecks.

Alternatively, you can slowly step-up you contributions one month at a time. Start small with amounts you’re unlikely to miss, that way you can adjust your budget as you go.

If you contribute six percent to a 401k, for instance, raising your contributions by half a percent each month would accomplish this stretch goal — while easing you into smaller paychecks.

2. Put half of your discretionary income toward your debts

If you’re trying to pay down your student loans or debts aggressively, you’ll probably have to find extra cash in your budget. To stretch yourself and your budget toward this goal, make it a goal to use 50 percent or more of your disposable income each month to repay your debts.

Your disposable income is the amount that’s left over after you cover fixed monthly living costs, such as your rent, loan payments, and insurance premiums. In the U.S., the average household discretionary income is just over $20,750 annually, or around $1,730 a month, according to a Motley Fool analysis of 2015 U.S. Bureau of Labor Statistics data.

Therefore, if the average U.S. household put half of their discretionary income toward their debts, that would be an extra $10,375 toward debt payments each year.

Of course, spending just half of your discretionary income requires some measure of self-control and doing without. You’ll also need to track your spending and start skipping out on non-necessities.

By scrimping and saving, you’ll free up the money you need to take chunks out of loan balances and quickly pay off debts.

3. Get a promotion (and a raise)

Maybe your income simply falls short of what’s needed to achieve the financial security you want.

If this is the case, it’s time to make it your goal to get a big pay raise in 2017. But doing so will require that you step it up at work and prove your value as an employee.

To start working toward this goal, set up a meeting with your manager to ask for a raise. If you feel you’ve made a big impact in the past year, either by expanding your role or contributing to the company’s bottom line, point that out. You might be able to make the case that you already deserve a raise.

If you still have some work to do to earn a raise, ask your manager how to work toward that goal. Try to identify specific milestones that can help show you’ve earned one as well.

Pay attention to these conversations, and make sure you follow-up regularly to ensure you’re on track to get a raise. If it starts looking like you’re not going to get one from your current employer, start looking for jobs elsewhere. Switching jobs can often be the most effective way to significantly increase your income.

4. Get a side hustle with a higher hourly rate than your day job

Starting a side hustle is a smart way to diversify your income and create wealth. But it can also eat up your free time and drain other resources, like your energy or motivation.

To ensure a side hustle is worth it, you need to be able to earn more per hour doing your side gig than you do through your day job. However, earning that much through a side hustle probably won’t happen on day one. You might need to start charging less to build experience, a portfolio, and a network of references and clients.

Spend some time working on a business plan for your side hustle, researching what you can realistically charge and how long you can expect to spend ramping up a business. Then, get to work hustling and building a side business that pays better than your main gig.

5. Build a multi-month emergency fund

An emergency fund is an important financial buffer that helps keep your finances on track, even in the face of hardships or unexpected expenses.

Many experts recommend being able to cover a minimum two months’ worth of expenses with your emergency fund. Others may suggest as much as six- to eight-months of savings.

If you don’t have an emergency fund, saving one that’s equal to a few months’ worth of expenses is an aggressive goal. But you can achieve it.

Look for expenses you can scale back on to save more. And, consider picking up a side hustle and putting those extra earnings toward your emergency fund.

Do you have a tax refund or bonus coming down the pipeline? Put these windfalls into your emergency fund, too.

Whether you’re tackling debt, growing your income, or saving a nest egg, a financial stretch goal can help you do more with your money.

Working toward these kinds of money goals will challenge you. However, they will also prove that you can control your money and use it to do big things. And, you’ll also be creating wealth and building your net worth in ways that will benefit you for years to come.

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1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.29% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.29% APR assumes current 1-month LIBOR rate of 1.34% plus 4.20% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Benefit: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.39% - 29.99%$1,000 - $50,000Visit Upstart
5.29% - 14.24%1$5,000 - $100,000Visit SoFi
8.00% - 25.00%$5,000 - $35,000Visit Payoff
5.99% - 16.24%2$5,000 - $50,000Visit Citizens
5.99% - 35.89%$1,000 - $40,000Visit LendingClub
5.25% - 14.24%$2,000 - $50,000Visit Earnest
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