Many people set new goals for the New Year…losing weight…stopping smoking…cleaning out closets…but what about your financial goals?

If you set your financial goals, business and personal, and get to work figuring out how to reach those goals, you can improve your financial condition.

Make your goals realistic but make them a bit of a stretch too…after all the point is you need to be able to plan on how you are going to reach the goal. Don’t just pull a number out of thin air and then getting discouraged because there is no way you are going to make it.

One way to start your plan is to work backwards, starting with what you want to achieve.

Wealth can be measured by your net worth, so that is the place to start. Figure out what your personal net worth is right now by adding up the value of all of the assets you own and subtracting everything you owe (mortgage, car loan, credit card debt, etc.) Then set a goal of increasing your net worth by some percentage. Work out what you will pay on the amounts you owe without adding any additional liabilities like paying for things you can’t afford with credit cards, and then add a goal for some cash savings that will increase your net worth. That’s two more goals, spend less and save more.

Actions to increase your net worth:

1 – Pay down the principal on your liabilities like the mortgage or car loans

2 – Pay down credit card debt and stop using the cards unless you can pay off the balance in full when you get the monthly statement.

3 – Find ways to cut expenses – we all spend on items that are optional, right?

4 – Put a portion of every paycheck into cash savings toward an emergency fund (set a goal for the amount you want to reach in that fund)

5 – Once your emergency fund is built up, start putting some cash into investments that will grow (don’t overlook the benefits of a retirement savings plan account which can also reduce your income tax liability)

Next step: How much more personal income will you need to achieve that increase in net worth and pay all of the bills you will incur during the year? That number is the basis for setting the goal for an increase in your personal income. If you are earning $60,000 a year now, and you will need to earn $70,000 to make the net worth goal, then figure out what you have to do to make that happen.

The actions you take will differ based on whether you are a business owner or an employee, of course.

If you work for someone else, then the assets you have to sell to increase your income are skills and time. You can increase your skills and make yourself more valuable to your current company and ask to take on more responsibility for more pay. Or, you can get a second job or start your own money-making entrepreneurial activity that you can work on in your spare time.

Don’t overlook cutting back on discretionary expenses. You can save money on restaurant meals when you dine out by buying gift certificates for your own use for a fraction of their worth at http://tinyurl.com/restaurant-gift-certs-4-less and they make great gifts for giving to others.

As a business owner, your increased personal income demand is placed on your business. That means working out a plan to generate more sales and cut expenses wherever possible to pay you a salary increase and cover the increase of the cost of doing business in the coming year.

So, working backwards in the equation, how much of an increase in sales do you need to make that goal? How can you use your cash flow more effectively to generate more cash? Where can you cut expenses without harming the income production and profits of your business?

Becoming financially fit is not all that different from becoming physically fit. You start where you are and train yourself to use discipline and your brain power to perform better and make small, consistent improvements every day. Before you know it, you’re on your way to achieving your financial goals for the new year and better money management habits become second nature.

Money Saving Tips:

Save money on restaurant meals;  buy gift certificates for a fraction of their worth

Lose the fax phone line: Send and receive secure faxes by email and never miss another fax

Buy ink and toner at deep discounts and opt-in to receive the additional coupons by email to save an additional 10 – 15%

Buy shipping supplies at good prices and get cool FREE stuff for yourself or gift giving

Automatically protect your computer files for pennies a day

Do you have other great money saving ideas? Leave a comment and share them with our readers.