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January 4, 2024
Welcome to a new year full of new opportunities! 2024 is here, and it's the perfect time to set financial goals.
Whether you want to improve your personal finances, grow your business, or just ensure a healthier financial future, here are 7 tips to help you along the way.
1. Define Specific and Realistic Goals
Isn’t it satisfying to check things off your to-do list? That feeling also applies when you achieve a goal—no matter how small. A to-do list is really just a set of small goals when you think about it. Therefore, it’s important to set realistic goals that you can likely check off with varying degrees of effort.
Research shows that small goals that you can check off along the way provide more motivation, so if you have big goals, break them down into manageable pieces.
The ultimate goal could be anything from saving a specific amount of money, reducing debt, or investing in the stock market. Be specific in your goal-setting to make them more tangible.
For example, my goal for 2024 is to invest 100,000 NOK.
2. Evaluate Your Current Financial Situation:
Before setting new goals, conduct a thorough review of your current financial status. Compile your income, expenses, debt, and savings.
Understanding where you stand financially is crucial for setting realistic goals.
...and this may have changed recently! The price of your mortgage has increased, and so has much else.
If you want to create a detailed overview, download this template and fill it out either for yourself or with your partner/spouse with whom you share expenses.
https://docs.google.com/spreadsheets/d/1hzUOw1ETNbd55o26STjdrFKcdJ1pwtaWOJF7DORRSTQ/edit?usp=sharing
Perhaps you need to adjust the goal you set in point 1? (Budgeting could have been point 1, but since point 1 is the most important, we left it as is.)
I calculated this with our compound interest calculator (you can find several online) and found that I won’t have the capacity to invest anything until our house construction is complete (I have a few small savings plans, that’s it). I estimate that we’ll be done by June. Then I have 6 months to save 100,000 NOK. According to my calculator, I would need to save 16,200 NOK per month if I expect about a 10% annual return.
With my current monthly salary, that’s probably a bit too much. However, I think I can come up with a plan.
3. Make a Plan:
With clear goals in place, the next step is to create a plan to achieve them. This might include setting up a monthly budget, finding ways to reduce expenses, or learning more about investment strategies. A plan is not static; you can also adjust it along the way.
I currently earn 700,000 NOK in annual salary. However, I have significant debt, no assets, and children in daycare. The tax rate recommended by the tax authorities was no more than 26%. This means I should receive 43,000 NOK per month.
We have mortgage costs of 55,000 NOK per month. This leaves me with only 15,500 NOK after my share.
But is it really fair that I should pay 50% when I currently earn significantly less than my husband? We don’t think so, and we adjusted the share. I then pay only 14,300 NOK per month. That leaves me with 28,700 NOK.
I then have 12,500 NOK for other expenses—which is starting to look decent! Living expenses are high, but since my husband uses the car most, we can say that I don’t have a car. I only spend a few hundred NOK a month on transportation. I eat lunch at home (working from home), and he does most of the shopping.
(We have 100% shared finances, so it doesn’t really matter.)
In 2024, I also aim to buy only second-hand items and perhaps even sell some things to end up net positive on personal purchases. Additionally, we might adjust my salary in Stack. If I manage this, we’ll see. (Stay tuned!)
4. Prioritize Paying Off Expensive Debt:
If you have credit card debt, it's wise to prioritize paying it off completely first. High interest on debt accumulates compound interest just like stock funds, but with the opposite effect. Given that the risk is zero (you have to pay it regardless...), it's the best risk-adjusted return you can get. Period. Get rid of it.
If you’re struggling with this, you might set some small sub-goals for motivation’s sake.
I don’t have any of that at the moment, so it just depends on how much we spend on the final part of the house..
5. Focus on Long-Term Savings:
Regardless of your financial goals, long-term saving is always a good idea. This could be through a retirement account, investing in stocks, or real estate. Long-term thinking ensures financial security for the future. Even though you should have small, manageable goals for 2024, these are really just pieces of the puzzle for achieving your larger goals.
My long-term goal? A ski-in, ski-out apartment in Geilo. It’s been my dream since I was a little girl with a cabin at Hagafoss, 10 km away. It’s not that far, but I spent a lot of time on the slopes, and while others could go home for cocoa and après-ski, I had to go home 😞. Additionally, it’s much easier with kids and everything that happens if you’re close to the ski trails.
My 100k NOK invested in 2024 will go straight into the "mountain-apartment-fund," which I unfortunately drained for house building and the Stack by me startup project during 2020-2023.
So there you have it—goals can be adjusted along the way, even if they are long-term.
6. Invest in Knowledge:
Financial knowledge is an invaluable resource. In 2024, take the time to learn more about finance and investing. There are many resources available, from books and online courses to financial blogs and podcasts. Here are some of our offerings:
7. Monitor and Adjust Your Goals Along the Way:
Lastly, remember to track your progress toward your financial goals. It’s incredibly motivating to check off milestones as you achieve them. Additionally, life is unpredictable, and it may be necessary to adjust your goals and plans as you go.
Maybe I’ll only put 50,000 NOK into my ASK this year? We’ll see!
Setting financial goals for 2024 is an important step towards a healthier and more secure financial future. With clear goals, a solid plan, and the willingness to learn and adapt, you can make this year your most financially successful one yet.
And to all the women out there—planning is something we excel at!! So, forget the nonsense about women being hopeless with money. We manage about 80% of household budgets, and research shows that women, on average, achieve about 1% higher returns than men each year. Statistically, you should be handling the family investments. ;)
Good luck, everyone!
Best regards,
Madeleine
Hello, Madeleine and Christine here, the founders of Stack. We´re on a mission to democratize finance and make investing more accessible and fun for everyone, especially women. Join our community and let´s reshape the future of the economy together.
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