Setting financial goals is crucial for a prosperous future. If you’re unsure about what financial goals to pursue in 2024, here are some smart ideas to inspire you.
1. Clear Your Debts
According to the figures from the Money Charity (October 2022), the average unsecured debt per person in the UK stands at £3,895. When factoring in mortgage debt, the average per household rises to £65,746. Prioritizing debt repayment is essential, especially when some debts carry more severe consequences for non-payment. Take the following steps to manage your debts effectively:
- Identify your debts and prioritize them. If unsure, our handy guide could help you: Managing Debt | Debt Movement
- First, focus on debts that could result in the loss of essential services, such as heating or your home, or lead to legal action.
- Pay off your most expensive debts first. Credit cards, with an average interest rate of 22.03%, and overdrafts, which can charge up to 39.9%, should be tackled promptly.
- Consider transferring your debt to a 0% balance-transfer credit card to accelerate repayment. Those with excellent credit ratings can secure the best deals.
- Seek free support from organizations like Citizens Advice, StepChange, and turn2us.
2. Build an Emergency Fund
It’s important to establish an emergency fund that covers three to six months of your earnings. Start by creating a budget to identify your income and expenses, allowing you to identify areas where you can cut back. Take the following steps to build your emergency fund:
- Evaluate subscriptions and eliminate those you don’t use or need.
- Identify areas where you can reduce expenses.
- Shop around for the best deals on utilities, including your mortgage (if there are no exit fees).
- Take advantage of the increasing savings rates by comparing different savings accounts.
- Balancing debt repayment and saving is possible—learn how to prioritize both.
3. Begin Investing
Investing in the stock market has historically yielded higher returns over the long term compared to leaving money in a savings account. With inflation on the rise, cash savings lose value over time. While investing may seem intimidating, you can enroll in a free Investing for Beginners course offered by Times Money Mentor.
4. Start Your Own Business
You don’t need to be a millionaire to start a business, but having some capital to cover initial expenses and support your living costs is beneficial. Times Money Mentor offers plenty of guidance and tips on starting a business.
5. Build Your Pension
The size of your pension depends on the lifestyle you desire in retirement and your life expectancy. People often underestimate the amount needed for retirement. As a rule of thumb, contribute a percentage of your pre-tax salary each month equal to your current age divided by two. For example, if you’re 30, aim to contribute 15% of your salary. This figure includes tax relief and any employer contributions. Explore our tips on boosting your pension savings.
6. Save for Special Events
Once you have an emergency fund, you can start saving for significant events like a wedding or a dream holiday. Since these funds may be required in the near future, investing in the stock market might not be the ideal choice.
7. Get on the Property Ladder
If buying your first home is a long-term financial goal, identify your must-haves and nice-to-haves. Research affordable locations, necessary deposits, and strategies to save for them. Consider opening a Lifetime ISA (LISA), which requires at least one year of account opening before you can use the funds for a property purchase. Enhance your credit rating over a year to increase your chances of securing favourable terms from banks and building societies.
8. Achieve Financial Security
The ultimate aim is to have enough money to ensure comfort and protection for yourself and your family, even in challenging times. Consider the following products to achieve financial security:
Income Protection Insurance: Safeguard your income in the event of illness, injury, or redundancy.
Life Insurance: Provide financial protection for your loved ones in case of your untimely demise.
Private Health Insurance: Access private healthcare services and receive prompt medical attention when needed.
9. Pay Off Your Mortgage Early
Your mortgage is likely the most significant financial commitment you have. With careful planning, you can potentially shave years off your mortgage term and save on interest payments. Keep in mind any early repayment charges that may apply.
10. Retire Early or Opt for Part-Time Work
Achieving a better work-life balance has become a priority for many individuals, especially after re-evaluating priorities during the pandemic. Research conducted by wealth management firm Moneyfarm reveals that one in four 18 to 34-year-olds has set early retirement as a new financial goal. However, this goal necessitates paying off debts, including your mortgage, and building a substantial pension pot to support an early retirement lifestyle.
In conclusion, setting financial goals is essential for long-term financial well-being. Consider these top ten goals for 2024 to improve your financial situation in the UK. Prioritize debt repayment, build an emergency fund, explore investment opportunities, consider starting your own business, save for retirement, special events, and homeownership. Strive for financial security, pay off your mortgage early, and work towards achieving a work-life balance that aligns with your retirement goals. Remember, taking small steps today can lead to significant financial achievements in the future.
At Debt Movement we provide professional debt guidance and solutions that help you move out of debt. We offer non-judgemental financial guidance to relieve the burden of financial strain and offer support on your journey to financial freedom. Request a free call back today.
