Gen X: It’s Really, Finally Time to Set & Stick to Some Financial Goals
by Jennifer Murray
Only 64 percent of us are still pursuing our New Year’s resolutions by the end of January, a University of Scranton study found. When it comes to keeping financial resolutions, Generation X struggles even more than millennials do; only 16 percent of Gen Xers are currently pursuing specific financial goals and plans, according to Northwestern Mutual’s annual Planning and Progress Study. If you’re between the ages 33-48 and having trouble sticking to your financial resolutions, renew your commitment with these sound fiscal tips and tools.
Use a Long-Term Plan to Set a Short-Term Budget
Morgan Stanley recommends developing a wealth management plan focused around long-term goals, such as saving for retirement or your grandchildren’s college fund. Your goals in these areas will determine how much you should spend, save and borrow now.
Wells Fargo advises breaking down long-term goals into items you hope to achieve this year, those targeted for a two-to-five year time frame, and longer-term goals. For example, buying a car might be a goal for this year, while repaying your car loan might take several years.
An annual Fidelity Investment survey found American consumers’ most popular short-term savings goals are saving for emergencies and reducing credit card debt, while the most popular long-term goals are saving for retirement and college funds. To achieve these types of savings goals, many experts recommend pursuing a step-by-step savings strategy that starts with building an emergency fund of at least $1,000. This creates a habit of prioritizing savings, which then serves to support other savings goals. The Treasury Department provides a savings planner you can use to help reach your savings goals.
Approach Debt Strategically
To help you repay credit card debt, financial expert Dave Ramsey recommends a “snowball” approach. This involves paying off smaller debts first to build financial momentum for repaying bigger obligations. Ramsey suggests tackling your smallest balance first, then paying off your next largest balance, and waiting until after you’ve started building a retirement fund to tackle long-term mortgage debt. To assist with planning credit card repayment, CNN Money offers an online tool to let you adjust your monthly payments according to your desired repayment timetable.
If you find yourself the recipient of a financial windfall, such as an inheritance or lottery winnings, consider using it to pay off your debts faster. If you receive regular payments from an annuity or structured settlement, consider contacting a company like J.G. Wentworth that may be able to buy your future payments for a lump sum of cash now. You could then use the money to help pay off your debt. Follow J.G. Wentworth on Twitter for more money-saving tips.
Cut Your Spending
Spending less is the third most popular financial goal. One of the simplest steps you can take in this regard is setting up automated paycheck deposits into your savings account, which reduces the amount available to spend. Other ways to cut your major bills:
- Get a home energy audit and see where and how you can reduce your energy use (adding insulation may be especially beneficial here)
- Drive a fuel-efficient vehicle, get a good car loan rate and shop around for auto insurance
- Clip coupons and shop sales
- Pack a lunch and eat out less
- Shop at Goodwill and other thrift stores