The key to a financially successful New Year is planning and preparation, and now is a great time to get ready for 2022.
Review Your Year
It’s difficult to move forward without knowing your current strengths and weaknesses, so spend some time looking back at the past year, or the past few. What goals did you achieve, and where did you fall short?
If you notice that you have recurring goals that you struggle to achieve, try to identify your challenges in that area. What would help you check those goals off the list, or at least head in that direction.
Plan Out Your Goals for the New Year
If you have a tendency to set way too many goals and then fall off the wagon by February, try sticking to one or two major goals instead.
The format of your goals matter, too. A lot of people end up setting goals that are too vague, which sets them up for failure from the beginning.
But it’s not the goals themselves that will lead you to success. It’s the habits you establish along the way that point you in the right direction.
Try creating S.M.A.R.T. goals, which are specific, measurable, actionable, realistic and time-bound. These kinds of goals will help you stay on track.
Set a Budget
Budgets are for everyone, whether you’re just scraping by or you have more money than you know what to do with. If you don’t manage your money, you run the risk of spending it in ways that won’t serve you or your family well.
If you’ve never been much of a budgeter, start by simply tracking what you spend your money on. Take a month or two and keep track of every dollar you spend. There are plenty of apps that can help you do this simply, like Mint and You Need a Budget.
This will give you a starting point to see how you spend your money, and where you could be cutting back or spending money more intentionally.
From there, you can work your financial goals into your budget. Feeling overwhelmed? You can enlist the help of a financial advisor to collaborate on the right plan for you.
Check in Regularly
If you only think about your New Year’s goals in January, you’re likelier to forget about them by spring. Try working in regular money check-ins along the way, and include your spouse or partner if you’re in a relationship.
Then, aim for a quarterly goal re-evaluation to tweak or add goals along the way. A lot can change in a year, and you may need to adjust accordingly.
Pad Your Emergency Fund in the New Year
Even the most careful savers can be thrown off by unexpected events. If you don’t have a sufficient emergency fund, one surprise expense or market downturn can throw off all your hard work.
According to Bankrate, more than half of Americans don’t have enough money saved to cover three months’ worth of expenses. Of that, about a quarter of Americans surveyed have no emergency savings at all.
It’s not fun or exciting to put money aside for a rainy day, but as many people learned from the pandemic, it’s essential to have. You never know what the year could bring, so if you don’t have an emergency fund that could cover at least a few months of expenses, you might want to add that to your list of goals.
Plan for the Future
Are you confident that you’re on the right track with your retirement savings? Many people think their company 401(k) is enough, but in reality, those plans can fall short.
Take the time this year to make sure you have a solid retirement plan in place, and that you’re taking the steps necessary to support that plan.
You can learn more about retirement savings in these posts:
Do you need help planning for your financial future? Contact me today to set up a meeting to talk about your goals.