Thinking about money in the long term is something that easily stresses a lot of people out. One thing I love about a new year (and a new decade!) is the opportunity to rethink parts of your life and then start fresh. A few years ago, setting money goals kind of felt like a foreign concept and I had a hard time thinking of what my goals could even be. So I did some research and now I have a whole list of money goals you can set in 2020. Read on for inspiration.
20 Money Goals You Can Set in 2020
1. Increase your net worth
Are you tracking your net worth? It’s a great way to keep tabs on your financial health and check that you’re going in the right direction. If your net worth is steadily decreasing, you know something needs to change. On the other hand, if it’s steadily increasing, you know you’re doing something right! You can read how to track your net worth and grab my free net worth tracker here.
2. Increase your credit score
Is it just me or do credit scores feel like a temperamental math teacher who lives to make your life harder and more confusing? Unfortunately, having a bad credit score can cost you a lot of money, and the things on your credit report can even make it difficult for you to find a job. While I don’t think having a low credit score should keep you up at night, it’s definitely important to check in on it and make sure you’re steadily improving. Read more about how to understand and improve your credit score here.
DEBT
3. Pay off a Credit Card
As of 2018, Americans now have a collective $1 trillion in credit card debt. Chances are, you might have some lingering credit card debt yourself. And since interest rates are often so high on credit cards, the debt can often feel impossible to pay off. Make this the year that you take action on it! Come up with a plan for how you can pay your credit card off completely this year. If you have lingering credit card debt, this should be your priority in money goals you can set for 2020.
4. Make 2 Monthly Payments on Your Credit Card
If paying off your credit card entirely feels too overwhelming or impossible, start making multiple payments each month, like after each paycheck you get. Not only will this help you bring your balance down faster, but it can help your credit score too.
5. Pay down student loans
Paying down student loans can also help you improve your credit score and increase your net worth. Set a goal to make extra payments or to pay them off entirely. Your future self will thank you.
6. Refinance your loans
I don’t know a lot about refinancing loans, but I do know that if done correctly, it can save you a lot of money on interest. This in turn will help you pay them off faster so you can move on to better, more exciting money goals. Do some research on reputable sites to see if refinancing would be a good option for you.
7. Make extra car payments
Try setting a goal to make extra car payments every month. Even paying an extra $10 a month can help your finances in the long term. Take stock of your budget and see what’s possible.
8. Pay off your car loan
Better yet, why don’t you pay off your car loan entirely? Just think what you could do without that car payment in your monthly budget. Paying off a loan early will not only add to your monthly budget, but will also give you more room to tackle other goals. This is definitely one of the best money goals you can set in 2020.
9. Make extra mortgage payments
If you’ve paid off your credit cards and student loans, a great next step would be to make extra mortgage payments. You could set a goal to pay an extra dollar amount off by the end of the year, or at least just one extra full mortgage payment by the end of the year.
SAVINGS
10. Save an Emergency Fund
If you don’t have a designated emergency fund yet, this should be your #1 financial goal this year. If you’re still actively paying down debt, a smaller emergency fund of $500 – $1,000 will suffice. On the other hand, if you have paid off your debt, an emergency fund with 3-6 months of expenses is best. This will protect you from job loss, sudden house and/or car repairs, unexpected medical bills, and so many other circumstances. You can read up on emergency fund basics here.
11. Save for Retirement
Make a goal to increase your retirement savings this year. Your first goal should be to contribute enough to your 401k to get the full company match if you have one. Once you’ve done that, you can start contributing to an IRA or bump up your 401k contributions by a percentage or two. If you’re not sure what to focus on, this book was incredibly helpful for me when determining our retirement savings strategy. TLDR; make sure you get that company match. If you’re feeling young and spry and don’t yet see the point of saving for retirement, look into compound interest. If you start saving for retirement in your 20s, your money will multiply in crazy amazing ways. As in, you could have hundreds of thousands more dollars if you start saving earlier in your 20s.
12. Save for a down payment
Whether it’s for a house or a car, it’s good to be prepared! The bigger the down payment you can put down, the better your interest rate, the lower the debt, and the healthier your net worth will be. Win win win. If you don’t have any debt to pay off, this is a great option for a money goal you can set in 2020.
13. Start a vacation fund
If you’re feeling pretty good about your debt, retirement savings, and emergency fund, start saving for something fun! We have a separate travel savings account with Capital One that we squirrel small amounts of money into when we can. It hasn’t led to an awesome vacation yet, but it has helped immensely with travel costs for visiting family during the holidays.
INCOME
14. Find a side hustle
If you’re feeling overwhelmed by debt or your difficulties in starting an emergency fund, then starting a side hustle might just be a good way to go. Consider cleaning houses, walking dogs, house-sitting, or driving for companies like Door Dash. There are so many side hustle opportunities out there right now and you’re bound to find something. Just be wary that you don’t pick one that requires a lot of money up front, as that can take you months to earn back before you start making a profit (if ever).
15. Work on getting a promotion
This one in particular is a worthwhile goal that will yield benefits for YEARS to come. Make it a goal this year to do what it takes to put yourself in line for a promotion at work. Talk to your boss and see if there’s anything more you can do to contribute to the team. Ask if there are certifications you can get that will increase your pay. Make a plan to set yourself up for success and not only will you have extra funds in the budget, but you’ll also be more highly qualified and competitive for future jobs, and it will set you up for bigger paychecks for years to come.
HABITS
Picking 1 or 2 habits to change this year is a goal that will save you money now and for the rest of your lfie. Not only that, but so many of these habit changes will be beneficial for other areas of your life too, like your health and productivity.
16. Cut your fast food habit
This can be an easy one to fall into but is such a money drain. If you can get meal planning and eating at home down, you’ll save a tonnnn of money and will likely be a lot healthier for it too! That’s why this is one of the best money goals you can set in 2020 and one of the best health goals for 2020 too!
17. Quit paying for a gym you don’t use
If you’re not using that gym membership you’re paying for, cancel it and come up with a new exercise plan. There are so many ways you can exercise for little to no money, so there’s no reason to be paying for a gym membership you never use. If you LOVE going to the gym, then come up with a plan for how you can get in your happy place more often to make the money worth it.
18. Cancel unused subscriptions
This is another big money drain you have to be careful with. SO many things come with a subscription now. It’s helpful to evaluate what you’re paying for every few months and cut out what you don’t use. Are you really using Spotify, Amazon Prime, FabFitFun, HBO, Hulu, BirchBox, etc. etc. etc.? You could save hundreds of dollars this year by cutting the things you don’t really use or don’t really care about.
19. Stop throwing food away
I’ll admit, this is a tough one for us too. Often I have lots of intentions to cook all those pretty vegetables I get at the store. But then I get home from work and I’m tired and that frozen pizza sounds like a way better idea. If you’re throwing food away each week, reevaluate your meal planning. One thing I did was start buying frozen veggies that wouldn’t go bad if I didn’t use them that week. Another thing that helped with our food waste was to be more realistic about the number of meals I would cook. Instead of planning a meal for every night, I started planning leftovers into our week. We inevitably have some!
20. Pay Yourself First
It’s tempting to tell yourself that you’ll spend money on whatever needs arise during the month and then put the rest into savings. Realistically though, that rarely happens. Speaking from experience, here. Get in the habit of planning out your spending and saving beforehand, and then put your money into a savings account as soon as you get paid. The best way to do this? Set up automatic drafts into your savings account. This is probably the easiest way to start a habit in the history of mankind.
What’s your financial goal for 2020?
It’s never too late to start setting goals for the next year! Charles and I haven’t even discussed our goals yet, but we will in the next couple of days. Leave a comment and tell me what your goals are! I always love to hear about other people’s financial goals!
