The key to a better financial future is to set up both short term and long term goals. There are a lot of financial advices available out there but the key is identifying any of these advices that applies to you and try to incorporate those to your specific financial situation. You should always make it a habit to try setting up REALISTIC goals and always put a time frame to achieve them. I am not here to post another financial advice. Instead, I’d like to share our short term financial (less than a year) strategy on how to better our finances. For this year my wife and I are working on the following goals:

Paying off our credit card balance. We currently have three credit cards that have outstanding balances of around $5,000 in total and we are on our way to paying them on or before the end of the year. The key is paying off the ones with the highest interest first. Also, we’ve tried to pay cash as much as possible from now on so we don’t add up more balance in them. As soon as we pay them off, we would still be using our credit cards but  we will be paying them off immediately the following month so we don’t’ have to incur any interest charges. As you can see, we still want to keep using our credit cards but for the sole purpose of establishing and maintaining our credit.

Setting up an emergency fund. Most experts would say that we should have an emergency fund that would cover at least six months of expenses in case we become disable, lose a job, or when any other emergency occurs. So far, we are pretty behind on this as we only have a month worth of funds to cover our monthly expense. I’d like to pay-off the high interest credit cards first before we are able to start contributing to our emergency fund.

Open a retirement account for my wife. So far, I’m the only one that has a retirement account, which I have from work. I’d like to start a Roth IRA for my wife so she can have financial security in the future as well.

Supplement Life Insurance.  Our only life insurance are coming from work, which is only worth three times my annual salary. Some experts would say that we should have a life insurance that is worth ten times our annual salary. So this year, I am shopping around on the net to find an affordable term life insurance to supplement the ones that I have from work.

Upgrade disability insurance. Every October, we have to renew our health insurance benefits from work. I’d like to be able to upgrade my disability insurance to at least cover 100% of my salary and only have a seven day waiting period. My current disability insurance benefits has a fourteen day waiting period and only pays 70% when I become disabled.

At the end of the year, I am going back to this post and see how much of this goals have we achieved!!