When the bells of midnight toll and 2020 rolls in, we have the chance to start again. “New Year, New You”, the magazines say, and it’s true: it is a prime opportunity to start a new phase in our lives, to make proactive changes which enrich us in every sense.
The New Year’s resolutions we make are often hard to keep as they involve giving up entrenched habits, including things we enjoy. This year, why not commit instead to doing something that is actually rewarding?
If you commit to taking control of your financial situation with these 15 smart financial goals, it will make a significant, tangible difference. Spring clean your finances and you will enhance not only your financial wellbeing, but your personal wellbeing as well.
Smart Financial Goals to Set for Yourself In 2020
1. Declutter Your Life and Your Mind
No one thrives in chaos. In 2020, it’s time to get organised. A great way to get organised is by selling off unwanted items.
I’m going to sort out my wardrobe and the various unsorted boxes and drawers of goodness knows what, and eBay everything I no longer need. If it doesn’t sell, I’ll send it to the charity shop so at least it is doing good.
I’m going to take the same approach to my mind, putting aside time each day for meditation so I can think clearly and will feel less stressed and chaotic.
To declutter your mind, you have to become intentional on where you place your attention and how you spend your time and energy, because it’s lack of clarity that creates chaos and frustration.
Put aside time each day for meditation so you can think clearly and will feel less stressed and chaotic — it’ll give you much-needed breathing space to start the New Year afresh.
At the same time, clear out the things you don’t use or need from your home and office, selling them on eBay, taking them to the charity shop, or sending them for recycling. You’ll be amazed by how much more powerful and in control you feel in an environment you’ve consciously curated.
2. Pay Off Any Bad Debts
Bad debt ties you down, not just financially but psychologically as well: it’s like a weight around your neck. In 2020, commit to setting yourself free.
Prioritise paying off credit cards and any other loans with high interest rates. By reducing interest payments, you will have more free cash with which to pay down everything else.
Tackling bad debt will have a positive impact on your credit rating, opening up your options and reducing your monthly outgoings.
Have you tried to get out of debt, but didn’t succeed? Have you tried again and again? Are you getting to the point where you just want to give up? Before you do, join our 7-Day Free Get Out of Debt Callenge for a simple step-by-step guide to getting out of debt fast below.
3. Maximise your ISA Allowance
An ISA is a savings account where you can save or invest money without paying tax on the return you make on your investment.
You don’t need a large amount of money to open an ISA: you can start a regular savings plan from as little as £50 (capital at risk), and you have the option to divide your money between a cash ISA, a stocks and shares ISA, or an innovative finance ISA.
Maximising your ISA allowance in a stocks and shares is a smart financial goal because it makes your money work harder for you: the interest rates are typically higher than in a savings account, and with a Help to Buy or Lifetime ISA (LISA), the government chips in a bonus, too. You’ll therefore reach your savings goals much faster.
4. Know Your Net Worth and Keep Track of Your Expenses
How much are you worth? What do you spend? If you have no idea, it’s time to track your net worth and finances. Tracking where your money goes is a key part to taking charge of your finances.
Knowledge is power, as they say, and with this information you’ll not only be able to see where you can make additional savings (or treat yourself!) but also be able to chart your progress and feel a sense of achievement.
5. Update Your Career Goals to Reflect Where You Want to Be
In January 2020, where do you want to be? Set your professional goals now and it’ll give you the direction and focus you need to keep going when things get tough.
Many of us want to boost our income: that’s a logical, smart financial goal. If it’s on your agenda too, specify the steps you’re going to take, be it negotiating a salary raise, applying for a promotion, pitching for bigger contracts, or starting a small business on the side.
The steps you decide on might seem small, but collectively they’ll have a much more significant, positive impact on your bank balance by the end of the year.
6. Check and Improve Your Credit Report
Your credit score is like the monster under the bed. If you square up to it and shine a light on it this year, it will look an awful lot less intimidating, and will cease to be a monster at all!
Your credit score explains how banks and other lenders see you. If you understand this, and follow their tips throughout the year, your credit score will gradually get better, and that makes it easier (and cheaper) to get credit as and when you need it.
Don’t hide from your credit score: engage with it. 12 months is sufficient time to see a noticeable improvement, to move up from “Poor” to “Fair”, or even to “Good”!
7. Build an Emergency Fund for Rainy Days
In 2020, not everything is going to go to plan: that’s life. But you prepare financially for unexpected troubles, so that money needn’t be one of your worries. You can then concentrate your energy on your health, family, job hunt, or whatever else it is you need to do.
The easiest way to starting building your emergency fund is with an automatic savings app. Chip monitors your income and outgoings to calculate for you how much you can afford to save each month, while Moneybox rounds up your spending to the nearest pound and saves the difference in a designated account.
The good news is that you can get a 2% interest on your savings if you use the promo code: NUGGETS2 with Chip. These apps take the effort out of creating a rainy day pot; you can sit back and watch it grow, enjoying the peace of mind.
8. Negotiate Your Bills
Are you getting the very best deal you can from your utility providers? Probably not! This year, make it one of your smart financial goals to be more proactive in sourcing new deals and negotiating discounts from existing service providers.
Explain that you’re considering switching, and ask them if they can match or beat their competitors’ price.
Even if you only shave a few pounds a month off each bill, by the time you multiply that across broadband, electricity, gas, your mobile phone etc. it quickly adds up. And you’ll refine your negotiating skills, too!
9. Review Your Recurring Bills
Internet banking is incredibly convenient, but because of that we’re not always on top of what goes out every month. Are you paying for Netflix subscription you don’t use? Is there an old direct debit you’ve forgotten about?
It’ll take just 10 minutes to check the recurring payments on your bank account online. Highlight anything you no longer need or want, and cancel it.
Then check when your other payments are due for renewal, and make a note in your diary to negotiate a loyalty discount or change supplier using uSwitch.
10. Look for Creative Ways to Reduce Your Expenses
In 2020, get creative about cutting your outgoings. This doesn’t mean that you have to go without: far from it. Rather, think and spend your money smarter so that it goes further.
Shopping around for better deals will certainly help, as will initiatives such as car sharing, using the Uber Pool rather than riding alone, making a packed lunch rather than buying one, and using a refillable coffee cup at work.
All of these things take a little thought but very little effort, and collectively the savings across the year all will add up. In many cases you’ll also be having a positive environmental impact so it really is a win-win situation.
11. Educate Yourself Financially
In 2020, one of the most valuable smart financial goals you can set is to educate yourself financially. Put time aside to become better informed. With the right information, you’ll not only feel more confident but also make better choices about how you spend, save, and invest your money.
You can learn the basics online: We have a huge range of articles about financial topics, written in accessible style. If you need more detailed guidance, you might also consider working with a money coach, booking an appointment with a qualified financial advisor or joining our new Facebook Group.
Learning together provides great motivation for sticking at it, and it can broaden your social life with ambitious, like minded women.
13. Make Your Money Work Harder for You
You have to have lots of money to invest, right? Wrong! A new generation of online investment platforms and micro investing apps such as Wealthsimple and MoneyBox makes it possible to invest even tiny sums, and also give you the benefit of professional fund managers’ expertise.
In 2020, it really is a smart financial goal to invest. If your money just sits in a savings account, the interest rate will be miniscule, not even ahead of inflation.
Investing online is not without its risks, but if you choose a FCA regulated platform and invest only what you can afford to lose, you can quickly create a diversified portfolio and generate good returns.
14. Review Your Insurance Regularly
Travel insurance, phone insurance, car insurance, contents insurance… insurance is an essential part of modern life. This year, consolidate as many of your policies as possible with a single service provider to get the best deal.
Shop around, haggle with service providers to ensure they’re applying all possible discounts to your quote, and also check out the premium account options with your bank.
Although there is usually a small monthly fee, premium accounts often include insurance products for free, as well as other benefits such as access to a designated account manager or lower interest rates.
15. Create A Workable Budget
Budgeting doesn’t have to be a painful experience. In fact, it can be liberating as you’ll see plenty of places where you can save a little, and over the course of the year these small sums add up.
If you’ve a friend in a similar financial situation, why not pair up and become budget buddies? Be sure to include rewards in your plan — whether it’s a meal out or a holiday with friends — to encourage you to stay motivated and work towards specific goals.
15. Create A Financial Plan for the Year Ahead
Starting the way you mean to go on, create a plan for your money. Incorporate your budget and lay out where and how you going to spend, save, and invest it this year.
It is possible to do this in a notebook or on an Excel spreadsheet, but it is far easier to use our free financial planner. Print it out and put it somewhere you’ll look at it often, to remind you what you are doing and why.
You’ve read our 15 smart financial goals for 2020. Which ones of them are you going to adopt? What do you want to achieve by the end of the year? 2020 is in your hands!
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