With January marking both the start of a new year and the national observance of Financial Wellness Month, it’s a great time to prioritize your financial well-being. And of course, this often means putting into place and implementing any money-related goals needed to set yourself up for financial success in the coming year — and beyond.
Not only can setting long-term financial goals help you be more mindful about your spending and more purposeful about putting money away, it can also put you in a much better position to achieve major money-related objectives such as buying a home, financing a comfortable retirement, paying for your own or a child’s higher education, and more.
7 tips for setting — and achieving — your financial goals
In most cases, though, simply setting lofty money-related goals isn’t enough to make them happen. It’s important to set actionable goals that are a fit with your financial reality and to implement definitive steps toward achieving them.
To start taking meaningful steps toward achieving your biggest financial dreams in the coming year, consider these seven tips on how to set financial goals and keep your progress toward achieving them on track:
- Be realistic — A common pitfall when making New Year’s resolutions (financial or otherwise) is aiming too high. And of course, setting unrealistic goals is typically a recipe for disappointment. So, to increase your likelihood of success, strive to set attainable goals that realistically align with your current financial situation and your past savings successes. When laying out your financial objectives for the year, carefully consider how long each will likely take to achieve, how big a sacrifice each will require and whether incorporating the steps needed to achieve each goal can reasonably be incorporated into your day-in, day-out financial habits. By setting goals that you can actually accomplish, you can maintain your motivation to keep pursuing them — and pursue loftier goals once you’ve checked your current objectives off the list. It’s OK, and often even desirable, to start small and step up your goals as you achieve the easier ones.
- Stay S.M.A.R.T. — By following the “S.M.A.R.T.” formula when setting your money-related goals, you can better ensure that they’re a fit with your financial situation and resources. For example, if your goal is to save more money, aim to set an objective that is:
– Specific: For example, “I’d like to set aside $6,000 this year.”
– Measurable: By, for example, putting the funds you’re setting aside into a savings account, you can easily track your progress and see how much farther you have to go to reach your goal.
– Action-oriented: Consider the smaller steps you’ll need to take to achieve the goal and whether you’ll have the drive and willpower to make them happen. For instance, the $6,000 annual savings goal mentioned above would require setting aside an average of $500 a month, or $125 a week. Is this an amount you can resolve to maintain over the course of the year?
– Realistic: While your goals can be ambitious and challenging, they should be limited to ones you know you can realistically accomplish with the financial resources you have available to you.
– Time-bound: By setting a deadline for your goal, you can better hold yourself accountable for taking the steps needed to achieve it. And if you realize along the way that you’re not on pace to meet your timeline, you can make strategic adjustments as needed. - Put priorities in place, and proceed strategically — Whatever your financial goals may be, maintaining your financial well-being should always be a top priority. For most of us, this means ensuring that we’re paying off all of our bills and debts in a timely manner, making sure we’ve got an emergency fund at the ready so we’re prepared should unexpected expenses arise, and otherwise building and maintaining good credit. It can also involve making strategic financial decisions such as paying off high-interest debts like those carried on credit cards before devoting our funds to other objectives.
- Build a budget with an eye toward achieving your goals — Once you’ve determined your top financial goals, creating and sticking to a household budget is one of the best ways to increase your likelihood of achieving them. (For helpful tips on how to build and maintain a household budget, check out the Arthur State Bank blog article titled “9 Steps to Creating a Personal Budget.”) A detailed budget can help you assess whether your financial goals are feasible and help you avoid overspending — which can go a long way toward freeing up the funds needed to attain your money-related goals.
- Make sure any changes you implement are manageable — When planning and budgeting with your financial goals in mind, you may be tempted to make big financial changes in an effort to reach your objectives more quickly. But making drastic changes to your spending habits and/or lifestyle can set you up for failure, which can ultimately cause you to lose your motivation to keep pursuing your goals. Try to focus on implementing changes that will be manageable, allowing yourself small luxuries from time to time and targeting cutbacks on things you feel confident you can live without. These can include such moves as canceling seldom-used streaming services or reducing the frequency of your visits to the coffee shop. In most cases, taking small steps toward achieving larger financial goals will increase your likelihood of making any changes you put in place stick.
- Accept that setbacks will arise — Life is unpredictable, and it often brings unavoidable expenses that you simply hadn’t expected or factored into your budget … and that can have big impacts on your savings plans. Whether it’s an unexpected auto repair, unanticipated home repairs or an unplanned trip to deal with a family emergency, it’s important to accept that these things happen from time to time. Try to avoid letting the expenses (and their impacts on your savings goals) get you down too much. Even in the wake of setbacks, stay focused on achieving your long-term financial goals — and be sure to celebrate your successes as you achieve milestones along the way.
- Revisit, reassess and revise your goals regularly — As time passes, your financial situation is sure to evolve. And sometimes, life changes and other factors can have huge impacts on your financial goals and capabilities, making it critical to revisit and reassess them from time to time. Especially in the wake of major life changes such as a promotion or other career-related change, a home relocation, a change in marital status, or the birth of a child, be sure to adjust your financial goals and plans accordingly. And even when life’s changes are less substantial, be sure to regularly evaluate the progress you’ve made, the priorities you’ve set and the tactics you’ve put in place to reach your goals. In most cases, it’s good to revisit and revise your goals and plans at least once a year.
Proudly serving South Carolina since 1933, Arthur State Bank offers accounts and services to meet a variety of financial needs. To help you achieve all your financial goals, the bank offers in-person service as well as a range of convenient digital solutions. To learn how Arthur State Bank can help you with banking needs ranging from checking and savings to retirement accounts, mortgages, other personal loans and more, visit arthurstatebank.com.
