We’ve started a new year, and that means that many of us will be setting goals to help us accomplish our financial objectives. When setting goals for the new year, you can increase the chances of success if you follow a process for deciding on your goals — and carrying them out. Here are some helpful hints for setting financial goals for the new year:
Know Your Priorities
Before setting financial goals, it helps to understand your financial priorities, and understand your overall plan for your money. Think about your financial plan, and what you are hoping to accomplish, not only this year, but in years to come. Think about what you can do this year to help reach your longer-term goals. Figure out what is most important for you to accomplish; setting your priorities will help you figure out which financial goals you should pursue in the coming year.
Pick the Most Important Goals
Chances are that you won’t be able to do everything. Indeed, it can become quite overwhelming to try to accomplish everything you want to financially in one year. While you should be working toward keeping up with your savings and earning more than you spend, you don’t need to accomplish several huge goals all at once. Instead, consider your most important priorities and choose one or two big financial goals that will help you reach the long term milestones.
Create a Plan for Reaching Your Financial Goals
Once you know which goals you want to pursue this year, you can begin to make a plan of how to reach them. Studies show that writing goals down will help you increase the likelihood of achieving them. However, you need to do more than just write your goals down; you need to write out a plan that can help you reach these goals.
Consider what milestones throughout the year would help you achieve your bigger goal. You can break your one or two big goals down into smaller tasks. If you want to be really specific, you can identify time frames for accomplishing different tasks. Identify the steps that you will need to accomplish in order to make your goal a reality, and then be realistic about how much time you need to complete each task. You will have a road map that can be followed to help you achieve your objectives throughout the year.
Realize that You Can Start Over
There are indications that New Year’s Resolutions often don’t last beyond the first few weeks of the year. However, once you get off track, it doesn’t mean that you are done. You can always start over, or re-adjust your road map. Don’t let a slip-up put an end to your financial goals for the coming year. It is important that you do your best to continue working toward your goals. After all, financial progress isn’t just about the destination; it is also part of working toward your goals. As long as you are moving in the right direction, you will eventually reach your objectives, and put yourself in a better financial position.
This post was featured in the Carnival of Personal Finance.
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I would add be public with your goals, that way you have accountability and a couple of cheerleaders to support you.
I think my biggest downfall is not being able to realize I can’t do it all. I’m so eager to complete things, that I overwhelm myself
Briana,
I can relate!! Don’t give up. Just chew on a smaller piece. Start small and build upon success.
I use separate accounts to save for specific things. Back in the days of just starting my career, the retirement fund was just the matching amount. The extra money from each raise was put into that fund till I was putting in the max. It took 15 years to get to point, but I’m there.
I use various bank accounts for emergency fund and saving for a short term goal. The emergency fund goal originally was 2 months of living expenses. The extra went to a very short term goal. The short term goals were more like immediate needs that could be deferred a while. Everyone knows those, the tires are starting to bald but still legal type stuff. Completely paying off credit cards was in there. Since paying them off haven’t paid interest. Once the immediate goals weren’t so urgent, the energency fund was extended to 4 months. The immediate goals were larger and more likes than needs as time went on. The emergency fund is now is over 6 months.
The point is not everything is going to accomplished as once. Breath and enjoy the small successes. When you look back the success will be huge.
I like the idea of writing down a specific plan to reach goals. Seems it would make it more likely to actually reach those goals.