As you think about what you want to accomplish in the New Year, a number of financial goals might be on your mind.
Maybe you want to make this the year you finally knock out the rest of your student loan debt. Or, perhaps you want to tackle that financial goal of maxing out your IRA and prioritize earning more money.
There are so many ways to set New Year goals — and that can quickly get overwhelming. With so many ways to improve your financial life, how do you choose what’s most important to focus on?
Consider this your guide to help you hone in on the most important financial goal to hit in the next 12 months. We’ve put together a list of nine money goals you’ll want to reach in 2017, depending on your current financial situation.
If you still have student loans…
Your student loan debt is probably quite the financial burden. And it costs you a significant amount of money thanks to interest the longer you hold onto a balance.
Make it your financial goal to pay off at least one student loan this year. And if that’s not possible, you can still make a serious dent in what you owe by taking on one of these strategies for crushing your debt.
1. Pick a method for paying off your balances
Work with either the debt snowball or the debt avalanche repayment method when tackling your student loan balance.
Depending on which one you choose, make a goal to pay off your student loan with the smallest balance or the one with the biggest interest rate by the end of the year.
2. Sign up for the right repayment plan
If you haven’t already (or if you’ve been putting it off), set a goal to research and decide on a repayment plan to help you better manage your student loan debt.
This isn’t a requirement if you have student loans. But it could help. At the very least, your New Year financial goals should include “check out repayment plans” so you can discover whether there’s a program available that could help you.
3. Make extra payments
Are you only paying the minimum on your student loans right now? If so, then you should consider sticking to a financial goal of making an extra payment every month this year.
Or, try increasing your current payment by a dollar amount or percentage every single month in 2017. This will help you pay down your loans faster and save you money in the process. You can even calculate exactly how much you’d save using our Student Loan Hero calculator below.
Student Loan Payment Calculator
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4. Pay off all your student loans
How about making a big commitment in 2017 to pay off every last cent of your student loan debt? A few actions you could take to help you make this possible:
- Cut expenses and put the savings toward your debt.
- Reduce your cost of living by moving to a new location, taking on roommates, and embracing a super frugal lifestyle next year.
- Earn more money at your job, work a side hustle, or even seek a new position with higher pay.
If you’ve already paid off your debts…
You may not need to focus on student loan repayment in 2017 if you’ve already checked that goal off your list. Here are a few more New Year goals you can tackle instead.
5. Max out your retirement account
Whether it’s your 401(k) or some kind of IRA, try increasing your contributions this year and putting in the maximum amount allowed.
Here’s how much you can contribute in 2017 if you’re under the age of 50 via the Internal Revenue Service (IRS) guidelines:
- 401(k) plans: $18,000
- Traditional and Roth IRAs: $5,500
- SIMPLE IRAs: $12,500
- SEP IRAs: 25% of an employee’s compensation or $54,000, whichever is lesser
Select your retirement account and divide the maximum contribution allowed by 12. This will show you how much you need to save each month to hit your goal by the end of the year.
If this feels too intimidating, try a warm-up round this year and make some increases in retirement account contributions without maxing out.
You might want to max out your Health Savings Account (HSA) too if you have one. This can be viewed as a retirement account because you can roll over the funds year to year.
And, if you can go into retirement with money in your HSA, you can use that money — tax-free — for medical expenses as you age. You only need to contribute $3,400 in 2017 to max out an HSA. That breaks down to a $283.33 per month.
6. Start a “wealth-building” fund
Already on track with your retirement goals? Then let’s look at the years between now and age 68.
You’ll likely want to do a lot of big things with your life before you can touch your retirement savings. So make sure you balance your investments with money that’s not locked away in something like a 401(k).
Consider opening a brokerage account and contributing cash to investments there. This allows you to build wealth you can use throughout your life, not just when you quit working and retire.
7. Build up your emergency savings
Keeping six months’ worth of income in cash savings is a lot of money to set aside. And most of us couldn’t cover a $500 to $1,000 emergency expense if it popped up tomorrow.
So build yourself some financial security and make adding to your emergency fund a financial goal for 2017.
Your first step is deciding how much you want your fully-funded emergency savings to hold. A good rule of thumb is three to six months’ worth of income which will usually be more than your monthly expenses.
Divide this number by 12 to get a monthly amount you need to contribute to reach your New Year goal. Once you have a number, set up an automatic transfer, so you don’t forget halfway through next year.
If you’re getting ready to graduate from school…
The end of your university years is in sight and you’re ready to get out into the real world.
While you might be getting ready to celebrate, now’s the time to also think about your finances and prepare yourself for financial success. Here are a few goals you can start hitting up before graduation day.
8. Create a budget
You may not know exactly what your income will look like once you land your first job out of college. But you can estimate low and build a budget while you’re used to living on a smaller amount of money.
This is especially helpful if you expect to earn a lot more once you graduate. Base your postgraduate budget off your pre-graduation earnings or expectations to avoid lifestyle inflation.
By keeping your expenses low and in check with a higher income, you can generate more cash flow. From there, you can choose what you do with the extra cash — like repaying your student loans as fast as possible.
9. Get a head start on student loan repayment
You want to start repaying your student loans as soon as possible. Create a plan now and know exactly what actions you need to take to stay on track with debt payments.
The sooner you create the habit of sending in that loan payment, the easier it will be to manage your debt. What you really want to avoid is getting used to spending your money on other things — and then having to deprive yourself later when you can no longer afford to ignore your debt.
Start paying off your student loans as soon as possible. Your future self will thank you for not letting interest payments spiral out of control and ruin your financial success later on.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Rates (APR)||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!|
|2.75% - 7.24%||Undergrad & Graduate||Visit SoFi|
|2.57% - 6.39%||Undergrad & Graduate||Visit Earnest|
|2.57% - 7.12%||Undergrad & Graduate||Visit CommonBond|
|2.99% - 6.99%||Undergrad & Graduate||Visit Laurel Road|
|2.58% - 7.26%||Undergrad & Graduate||Visit Lendkey|
|2.89% - 8.33%||Undergrad & Graduate||Visit Citizens|
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