Five Smart Financial Goals for 2014

This is the time of year when many people are thinking about setting goals for the upcoming year. Perhaps you would like to get in better shape, take up a new activity, stick to a tighter budget or save more for retirement. Many people shy away from New Year's resolutions, but setting concrete goals for 2014 can be the start of making some truly positive changes in your life.

Achieving financial goals can bring greater financial security, independence and retirement readiness. Here are five smart financial goals to consider for the upcoming year.

Goal 1: Create a budget.

Writing down and tracking your expenses on a monthly basis can help you see clearly the reality of your financial situation. Many people don't understand how much they are spending until it is too late and the bills arrive. This is especially true during the holiday season. For your holiday shopping, figure out how much in total you can spend, and then work within that budget to take care of everyone on your list. To live within your means, understand how much you can spend on items before you make purchases. The budgeting exercise can also help you to look for opportunities to save money as you look closely at monthly expenses. Perhaps you can trim the cable or phone service, adjust auto or home insurance coverage, or cut out extras that are costing you more than you realize.

Goal #2: Pay off consumer debts.

Tackling consumer debt is not easy. Like any goal, you need to chip away methodically at credit card debt, even if it takes months to achieve success. With the interest rates on many credit cards reaching into the teens, it is worth it to wrestle control over this type of debt. Getting rid of debt allows you to focus on saving for long-term goals, and building your wealth through investing.

Goal #3: Save for retirement through an employer-sponsored plan, or individual retirement account (IRA).

This goal is the most important one to help you achieve retirement readiness. If your employer offers a matching contribution program, it's a good idea to contribute at least enough to take advantage of the employer match. Consider increasing your retirement plan contributions every year until you hit the maximum contribution amount; the start of a new year can be your annual reminder to bump up your retirement savings amount. In addition, look at whether your employer offers a Roth option within your 401(k) or 403(b); contributions to a Roth are after-tax dollars, and create the opportunity for your retirement savings to grow tax-free.

Goal #4: Have three to six months living expenses in an emergency cash fund.

No one wants to imagine a medical emergency or lost job, but it's essential to plan for this possibility. Savings of three to six months of living expenses can help you get through possible future bumps in the road, and not wipe our other savings such as retirement funds. With an emergency fund in place, you are stronger mentally to handle the ups and downs of the market. Knowing there is money sitting in an account for you that is safe, protected and liquid can be calming and allow you to focus more on long-term savings goals.

Goal #5: Have a financial game plan.

Accumulating wealth is a series of small steps taken over the course of years that have the potential to grow into something impressive. Generally, there is no simple get-rich-quick scheme or technique that will get you where you want to go in your financial life long-term. A financial game plan will give you a blue print to help you assess how much risk you should take on, what asset allocation is appropriate for you and how much you should be saving for each long-term financial goal, whether it is college funding, retirement savings or a down payment on a home. This is no easy task. A financial advisor can help you figure out your game plan.

As 2014 quickly approaches, think about tackling financial goals and putting new habits into place to reach your goals. You may know you should be doing more to take care of your finances, but may have not gotten around to it for some reason or another. With time, energy and dedication, you can make big strides next year towards long-term financial and retirement security.

ING Retirement Coach Jacob Gold is a third generation financial advisor. He is a published author of "Financial Intelligence; Getting Back to Basics after an Economic Meltdown", which was published in August 2009. Gold is a Certified Financial Planner practitioner and FINRA Series 7, 24 and 66 securities registered.