The New Year will be upon us shortly. Soon, the clock will strike midnight and everyone will cheer. And you will be faced with a new year full of possibilities. It is exciting to start fresh and a time to set goals.
Maybe this year you made some bad financial decisions. Maybe this year you hated the constant feeling that you were financially unhealthy. Maybe this year you felt like you did not use your money in the way God designed you to use it. If you are looking to set a few financial goals but aren’t sure where to start, let me provide you with a cheat sheet. All you need to do is pick three of these suggestions and chase them in 2016.
- Give away at least 10% of each paycheck. Preferably to your local church. If 10% seems daunting, do 1% for months 1 – 3, 5% for months 4 – 6, 7% for months 7 – 9, and 10% for months 10 – 12. By December, you will wonder why you didn’t do this earlier.
- Get rid of credit card debt. Credit card debt destroys your ability to be generous. The high interest rates cause you to throw away money every time you make a bill payment. There are two well-known methods for debt payoff—the snowball and avalanche methods. I recommend the snowball method.
- Make savings and retirement contributions automatic. For savings, set up automatic, monthly transfers from your checking account to your savings account. For retirement, make sure your pre-tax contributions are taken out of your paycheck.
- Contribute 10% to 15% of your paycheck to your retirement. This is now the recommended amount by many financial advisers. If your organization has some type of contribution match, try to take advantage of it.
- Get on track to set aside 6 to 9 months of living expenses. You probably will not be able to do this in one year. However, you can get yourself on the path to reaching this goal. Use automatic transfers from checking to savings to make it easier.
- Set up your kids’ college savings plan. No one should have to tell you now that college is expensive. If you want to help your kids during their college years, you must start early. A 529 plan is a great place to start.
- Pay down a chunk of your mortgage. Set a goal to pay down a certain amount of your mortgage principal. This will make more of your future regular payments go toward principal instead of interest.
- Read Matthew 25:14-30 once a month. Don’t forget why we take care of the money that has been entrusted to us. It is not about getting rich, but about being a part of God’s mission. It is about being conduits through which God’s generosity flows to others.
May 2016 be the year when you finally turn the corner and are able to use the money you have for something much bigger than yourself.