Forget budgeting. Here's a better way to meet your 2024 financial goals
Author: Maurie Backman
Source: The Motley Fool
It's that time of the year -- a time when a lot of people are about to start jotting down their New Year's resolutions in the hopes of bettering their financial situations.
There's absolutely nothing wrong with setting financial goals for the new year. And yours might run the gamut from cutting your spending to finally opening that RRSP so you can begin to save for retirement. But you might also hear along the way that if you really want to meet your near-term financial goals, budgeting is your ticket to doing so.
Let's face it, though. Budgeting can be boring. And it might eat up more time than you want to give up. So if you just can't stomach the idea of budgeting but you want to meet your 2024 goals, here are some things you can do instead.
1. Automate your savings
You might hear that if your goal is to boost your savings account balance in 2024, you'll need a budget to pull that off. Without a budget, you may not have the control over your spending that's necessary to carve out money for savings.
But if you don't want to follow a budget, you could set up an automatic transfer to your savings every month instead. That could mean setting $30, $50, or $100 (or whatever sum you can swing) to exit your checking account at the start of the month. But that way, you're working toward your goal and are sending money into savings before you get a chance to spend it.
2. Commit to a debt-free existence
If you're eager to meet your financial goals in 2024, then it's important to avoid taking on any more debt -- the exception being if your goal is to buy a home and you need to finance it with a mortgage. Any time you take on debt, whether in the form of a personal loan or a credit card balance, you lose money to interest. And if you're paying interest, you're not paying yourself that money.
Now, it's true that following a budget might help you better manage your expenses so you're less likely to resort to debt, or rack up a credit card balance you can't pay in full by the end of the month. But if you instead decide to limit yourself making to cash and debit card purchases, you may find that you're able to handle your bills and make the most of your paychecks.
3. Set realistic objectives
If you bring home $3,000 a month after taxes and spend $2,700 of that on essential bills, then aiming to save $10,000 in 2024 probably isn't realistic -- unless, of course, you're willing to pick up a side hustle to boost your income. And even if you stick to a budget religiously, that's probably not going to do the trick in helping you amass $10,000 worth of savings when your financial situation is such that $3,600 may be the best you can do.
So rather than worry about budgeting, instead aim to set realistic financial goals given your situation. You might think it's good to aim high. But if you set the bar too high, you might give up easily, and understandably so.
To be clear, budgeting may be a helpful thing for you to do in the new year. But it's certainly not your only option. So if you can't stand the idea of it, employ these tips instead.