5 Financial Milestones to Reach in 2015
When you're thinking about the goals you'd like to set and reach in 2015, don't forget to consider how you'd like to improve your personal finances and create a better situation for yourself. Not sure where to start? Try incorporating one of these five financial milestones to reach in 2015 into your new year's resolutions.
1. Learn More About Personal Finance
Did you find yourself wanting to learn more about your retirement accounts but didn't know who to ask? Have you been curious about HSAs or not sure what a certain investing term means? Did you want to learn more about money, but didn't know what questions to start asking?
Make 2015 the year to increase your financial knowledge and get the answers to the questions you've been asking (or figure out the right questions to start asking!). Read some general personal finance blogs like MoneyUnder30 -- and then look for other sites that talk about specific topics or issues you relate to (DailyFinance, of course, is a great start). Check out books at the library on financial planning. Tune in to financial podcasts. Book a call with a financial planner to see how a professional could help develop an action plan for your money goals.
And mark your calendar for the fall of 2015. In October, you can attend Financial Planning Days. These events allow you to book a free session with a financial planner to answer questions you have about your personal finances. You can attend classroom-style informational lectures, too.
To reach this milestone of continuing your financial education, make a list of three to five of your most pressing financial questions. Make it your mission to find the answers -- and take action on your new knowledge.
2. Boost Your Income
If you're happy in your current position and want to continue progressing in your chosen career path, it's time to think about boosting your income. Make it a goal to negotiate a raise in the new year.
Your first step: ensuring that you've actually earned that raise. Consider your strengths and look at the value you've provided to your company over the last six months to a year. When it's time for your performance review, explain to your boss how you go above and beyond and back up your claims.
Not quite there yet? Ask for additional responsibilities. Knock your next project out of the park. Look for innovative ways to get work done and provide solutions to common problems in your position. Taking action now can help you earn more from your job before the end of 2015.
3. Track Your Spending and Create a Plan
Yes, some people call it a budget, but I like the term "spending plan" because it sounds less restrictive. It's important to know where your money is currently going and then be able to redirect some of it toward your financial goals.
In other words, stop keeping every other receipt and calling that good enough, or trying to keep up with your spending and income in your head. Put a system into place and stick with it this new year.
Mint.com is a helpful financial tool that syncs up your debit, savings, credit card accounts and even loans you pay. With Mint, you can set a budget, like $200 a month for groceries, and see how much your groceries actually cost you a month. You will know how much you spent without having a running tally in your head.
You can also use spreadsheet templates and input information yourself, or use a more complicated software like You Need a Budget. The tool you choose isn't important -- what's important is that you choose something that helps you track your money, spending and goals -- and it's something you'll stick with throughout the year.
4. Increase Your Net Worth
You should also be tracking your net worth. Make this a habit in 2015. Your net worth is simply your assets minus your liabilities. Every time you add to your savings, you're building your net worth. That goes for paying down debt, too. The more debt you repay, the higher your net worth rises.
Tracking your net worth allows you to see your entire financial picture all on one page. It also enables you to see your progress -- or identify spots where you need to work to make that progress you want to see.
Sometimes we make our saving and debt repayment automatic and so it feels like we're not making much progress, but once you check in on your net worth, you'll see how much your plan is paying off!
5. Start a Side Hustle
Capitalize on your skills or monetize a hobby to create a side hustle in 2015. Doing so can help you develop extra income -- which you can use to accelerate your progress to other financial goals.
This is a financial milestone that everyone should reach, no matter how much you love your current job (or the full-time business you already run). Side hustles allow you to create diverse streams of income and open you up for new opportunities, experiences, and chances to learn new skills and abilities. It's a way of investing in yourself, while making extra money at the same time. Anyone can benefit from side hustling, including people established in their careers.
Not sure where to start? Think about what you're good at and what you enjoy doing. Then consider ways you may be able to sell whatever that is to others. If you need some inspiration, be sure to check out Carrie Smith of Careful Cents, who used her side hustle as a freelance writer to pay off $14,000 of debt before turning her side gig into her full time business.
Do you maintain the website at your full-time job? Consider taking those skills to a freelance marketplace. Have specialized knowledge? Monetize what you know by offering consulting services. Artistically inclined or talented in a crafty way? Use an online shop platform like Etsy to host and sell what you can make.
When you're thinking about resolutions and goals this time of year, don't forget to consider how you can develop a commitment to improving your finances. Reaching some -- or all -- of these financial milestones in 2015 will allow you to feel more empowered and able to manage your money and hit other big goals in the future.
Sophia Bera is a virtual financial planner for millennials and the founder of Gen Y Planning. She is location-independent but calls Minneapolis home. She offers a free Gen Y Planning newsletter and is getting ready to publish her first ebook to provide a Gen Y guide to empowered personal finances.