New Year’s Resolutions are notorious for wishful thinking. We go into the New Year fresh and excited about change! Change is great! Change is essential!
Only a few weeks later, we realise we were quite comfortable the way things were last year. Why mess with a good thing? Back to the status quo we go! Goals, specifically financial goals, are incredibly worthwhile. Having clear goals and creating an action plan can set us up for success. Financial goals that are successful equal increased wealth, and who doesn’t want more wealth?
So where to start?
Decide where you want to be by the end of next year
Do you want a new car? To buy a home? Have $x amount in your savings account? Contribute more to your 401(k)? Write down your ideal financial situation for the next year. Don’t over analyze at this point. Write down whatever comes to mind (within reason!). If you share financial decisions with someone else in your life, you both need to be involved in this process.
Pick 3 Things from your list
Now pick the 3 most attainable financial goals from your list. Notice I said, most attainable. The reason most New Year’s Resolutions become a distant memory by February 1st is because they are unrealistic. We are creating an attainable, realistic list of financial goals for the new year. Let’s set ourselves up for success!
Create an action plan
For each of your financial goals, we are going to create an action plan. If it involves saving money, find out how much you need to save and divide it by 12 months. Is that realistic? Can you really set aside that much money every month? If not, where you can strip it from your budget? Are there places in your budget worth sacrificing to save?
Having a clear defined plan of how you are going to attain your financial goals is essential. You will refer to this plan often throughout the year. Store it somewhere easy to find.
You’ve picked some financial goals, crunched the numbers to be sure they are realistic, and made an action plan for how you are going to accomplish them. Now you need to commit. This can be as simple as signing your name to the paper your action plan is on. Or it may mean setting up a monthly debit from your checking account to your savings account. Make it easy to stay committed. Don’t assume that you aren’t going to be swayed away from your financial goals the next time a cool new gadget or pair of gorgeous boots go on sale. If that means you directly deposit the funds straight from your paycheck to your savings account without you ever laying eyes on it, so be it.
Financial goals give us something to aspire to. They bring us to that next level of wealth, and prove to us that we can be self disciplined. What are your financial goals for the new year? The great thing about an action plan is that it can be applied to pretty much any goal you might have. Now that you’ve figured out your financial goals, what other resolutions do you think you’ll make for the coming year?