How Creating Financial Goals Will Help Your Finances


Last year after spending entirely too much on Christmas and putting the majority of it on a credit card, my husband and I decided that it was really time for us to take a hard look at our finances.

I received my last paycheck in August of 2015 following our decision for me to stay home with our daughter.  For the next few months, we just spent time learning how to live on one income.  While we were able to do this fairly successfully, we were not being intentional with where our money was going.  As long as we came in “under budget” we called that month a success.

I really like the idea of breaking your financial goals down and assigning them to each quarter or month - need to get on creating mine ASAP!

Our definition of a budget was not exactly perfect though.  We were borrowing money from the next month to “pay ourselves back” or putting larger expenses on a credit card and paying them off over the course of a couple months.  Nothing too horrible, but with our long term goal of paying off our debt fast, our strategy was not going to work.

I spent January doing some research and meeting with my husband to come up with some goals for the year. Starting in February, we embarked on our journey to meet those goals.

Our 2016 Financial Goals

Conduct a budget meeting and create a new budget each month.

Success! While we did not have a “formal” budget meeting as a couple each month, we did create a new budget, reviewed how the previous month went, and talked about upcoming expenses that would need to be included in the budget.  This was a HUGE game changer and something I highly recommend if you want to achieve your financial goals.

Stick to a grocery budget and reduce spending on groceries.

Success – sort of.  While we DID reduce our spending on groceries for the year by over $600, we did not stick to our monthly budget for the majority of the months.  I think the main culprit is not planning ahead enough for meals and forgetting to take into account holidays, birthdays, etc. where we inevitably would spend more money.  

Stop using credit cards for “unexpected” expenses.

Success!  Using our previous budget method, we were never prepared to pay cash for expenses larger than a few hundred dollars without dipping into our emergency fund.  Unfortunately, we thought it was better to use a credit card than touch our precious savings.  This past year we went through numerous issues with our house that cost us a total of a little over $5000.  AND WE PAID FOR IT ALL WITH CASH! With a little bit of strategic planning and a little bit of luck, this goal was met.  Not exactly what we would like to be spending our money on, but either way we are very proud of this!

Pay down our debt.

Success – kind of.  Our long term (but hopefully not too long) goal is to become debt free.  At the beginning of the year we used our tax return and some overtime money and paid off one credit card and a large chunk of a student loan.  SInce then we have not made much progress.

Have a cash only Christmas and spend $1000 or less.

Success – sort of.  We were able to use cash only for Christmas this year.  A huge improvement from last year.  While we did cut almost $700 from last year’s spending, we were still slightly over $1000 in the end.

While we did not end up meeting our goals in their entirety, we are still pretty proud of the progress that we DID make and are looking forward to this year and meeting our financial goals.

The key to success in creating and meeting financial goals is to know where your money is coming from, how you are spending it, and what is tying it up (like debt or unnecessary expenses) from being used towards your long term goals.

Earnest is a company that is dedicated towards helping you achieve your goals.  If you, like us, find one of your major hurdles to be student loan debt, take a look at the services they offer.  Below you will find our financial goals for 2017 included in a fun and helpful financial guide with smaller, bite-size goals or “challenges” for each quarter.  

Our 2017 Financial Goals

Use cash only for groceries and eating out – the two biggest budget busters for us.

We started doing this last year and it worked really well…until we stopped.  We are determined to meet our grocery and eating out budget each month and using cash only should help us achieve this – once the money is gone, it is gone!

Reduce overall spending on gifts (birthdays, weddings, Christmas, events).

Somehow this year we spent MORE money on gifts than last year (like significantly more) and that did not include Christmas.  This year we have already gone through our calendar of big social events and assigned a budget amount to each gift we plan on purchasing.  Then we added a little extra for the year to cover unexpected party invites.  

Track each and every purchase made in detail aka WHERE is our money really going?

While we did a really great job of tracking our budget using mint.com this past year, we found that when we were tallying up totals for the end of the year, we wanted to go back and review what we had actually bought in some categories.  Of course if all we see on our statement is Target classified as Home Improvement or Miscellaneous Expenses, it does not really tell us exactly what we spent our money on.  This year we will be utilizing the notes section to specify what it is we bought and what it was for.

Pay off at least 2 student loans by the end of the year.

We have two smaller student loans that should easily be knocked out this year.  That is our main goal.  A bonus goal would be to make even more progress than that on our other student loans.

There you have it.  Our 2017 Financial Goals.  I for one am excited to tackle them this year and see what we can accomplish!

What are some of your financial goals for the year?

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