Trying to create achievable financial goals for the year ahead can be overwhelming, especially if you have multiple resolutions you want to achieve. According to a survey from Forbes, the top three New Year’s resolutions include improving fitness, finances, and mental health.
The problem with resolutions is that many of them stop there, making them too broad and general. This is also why the vast majority of New Year’s resolutions – about 91 percent – fail.
That being said, with a little extra planning and consideration, you can create systems to help you achieve real improvement this year.
Step 1: Compile Your Data
Without looking at the past year, it’s difficult to know where you truly stand. Maybe you saved more than you thought, spent too much in one area, or didn’t track your money as well as you had hoped. Unless you look at the numbers, you might not know your true starting point.
Check in with your savings and checking accounts, emergency fund, retirement accounts, education savings accounts, and budget so you have an idea of how you did over the past year.
Step 2: Create your financial goals
Start with a high-level vision of what you want your year to look like. You might want to learn more about investing, or add more to your emergency fund, or buy a new house.
From there, get a little more specific. Figure out the numbers and details. Do you want to max out your retirement accounts next year? Add a certain amount to your children’s education savings? Put 20 percent down on a new house? Whatever your goal is, make it as concrete and specific as possible.
Step 3: Create your systems
Most of the time, New Year’s resolutions fail because people don’t have a system to go along with them. The resolution is the goal, but the system is the steps and habits you’ll create to get there.
Let’s say you want to contribute more to your retirement accounts, but you tend to forget about it, or other expenses get in the way. This year, you could set up automatic transfers into that account so you don’t even have to think about it.
Or, maybe you and your spouse want to get on the same page about your finances. In this case, your system could be setting up a recurring reminder on your calendars every couple of weeks to sit down and go over your finances together.
In so many cases, it’s these small changes that add up to real progress on your financial goals throughout the year. But if figuring out those next steps feels overwhelming, you could also work with a financial planner or other financial professional to help you navigate your goals.
For more help on creating your New Year’s resolutions, here are some of my previous posts:
3 Steps to Gain Clarity on Your Financial Goals
How to Prepare for a Financially Successful New Year
Smarter Resolutions: Focus on Just One Thing
About Michael
Do you need help planning for your financial future? Contact me today to set up a meeting to talk about your goals.