Your Guide to Setting Goals and Sticking to Them

12/1/2024

As the New Year approaches, it’s the perfect time to set resolutions that can bring positive changes to your life. For many, January marks the beginning of a new chapter- a time to reflect on the past year, recognizing what’s worked and identifying areas for growth.

While New Year’s resolutions often sound inspiring in theory, they’re challenging to fulfill, especially when they’re too vague or ambitious. Resolutions should center on self-improvement, whether by building new habits or letting go of old ones that no longer serve us. Rather than seeing resolutions as a burden, view them as an opportunity to focus on the positive impact that change can bring. 

Set specific goals with a plan to achieve them

It’s common to start the New Year with financial resolutions like paying off debt or increasing savings. While intentions are high, many people struggle to effectively carry out their goals. The key to success? Make your goals SMART: specific, measurable, attainable, realistic, and timely. By incorporating these given aspects, you’ll greatly improve your chances of achieving them.

How can you make your goals SMART? Start by making them specific: define the ‘who,’ ‘what,’ ‘where,’ ‘when,’ and ‘why’ of your goal. Specific goals have a higher likelihood of success. Next, make your goal measurable; without clear metrics, it’s hard to track your progress. You might measure your goal with a simple yes/no, true/false, or a numeric target.

Read More: Set Financial Goals This New Year

Attainability is crucial too. Assess the steps and resources needed to achieve the goal, so you can make steady progress. Tracking monthly helps keep you on target. A realistic goal is one that’s achievable with resources and time you have- avoid setting yourself up for frustration by being overly ambitious. Finally, make your goal timely by attaching a deadline. A timeline provides motivation and a clear endpoint. Remember: a goal without a timeline is just a wish.

Determine your goal

Now that you know your goals should be SMART, it’s time to decide on your New Year’s financial resolutions. You may choose a single resolution or set multiple financial goals. Paying off debt and building savings are two popular choices, and both play important roles in financial health and future planning.

If you have significant debt, start by building an emergency fund before aggressively tackling debt. Aim to save at least three months’ worth of living expenses to start, eventually building up to six months. While working on your emergency fund, continue making minimum payments on your debts to avoid falling behind.

Once your emergency fund is in place, focus on paying down high-interest debt. To start, calculate your expendable income by listing all regular expenses, identifying any you can reduce or eliminate, and determining how much extra you can allocate toward debt. Focus on one debt at a time while continuing to make minimum payments on others to protect your credit.

Read More: New Year, New Finances

The goal is to balance debt repayment and saving. Prioritize paying down high-interest debt, but don’t ignore savings altogether—any amount saved is better than none. Once your debt is paid off, you can boost your savings by redirecting the full amount you were using for debt repayment. The best approach is a balanced one that includes both debt reduction and consistent saving.

Get ready to goal

Once you’ve set your main SMART goal, consider adding smaller financial goals along the way. Working toward these mini goals while pursuing your larger objective can keep you motivated, as each small win boosts your confidence.

Set a timeframe of six months or less for each short-term goal. This allows you to start saving specifically for these milestones, helping you build a consistent savings habit. After reaching a short-term goal, you’ll be more likely to continue saving, which supports your progress toward larger goals. If money is tight, saving can feel challenging, but once saving becomes a habit, you’ll find it easier to keep going.

Read More: Minimize Your Debt This New Year

Now, automate it

Resolutions are challenging because they require changing habits. Not only do you need to break an existing routine, but you also must replace it with a new one- this takes time and persistence, which is why so many resolutions fall short.

Fortunately, financial resolutions don’t always require a complete habit overhaul. In fact, many financial goals can be set up in as little as an hour, early in the year when motivation is high. By harnessing automation, you can achieve these goals without drastically changing your behavior.

For instance, if you want to boost your savings, set up an automatic transfer to your savings account that aligns with each payday. To ease into it, start with a manageable amount- say $20- and set a reminder to increase the amount in three months. This approach doesn’t require any ongoing behavior changes. Simply take a little time early in January to set things up, and let automation handle the rest.

Read More: Get Organized This New Year

Track your progress and stay motivated

It’s essential to check in with your goals quarterly- if not monthly- to track your progress. Life happens, and unexpected expenses can impact your plans. Reviewing your goals every three months allows you to adjust and remain flexible in your approach.

When challenges arise, it’s easy to feel discouraged, but staying future-focused is key. To stay motivated, give yourself grace; take a step back, and re-evaluate your plan as needed. This may push your end date slightly, but a reset can be essential after an unexpected financial setback. Don’t let these hurdles deter you from your goals. Stick with the habits you’ve built, and you’ll still reach the finish line.

Whatever your financial goal, making finances a priority is a strong way to start the New Year. Begin by ensuring your goal is SMART and set smaller milestones alongside your larger objectives to celebrate small wins along the way. It’s natural to feel discouraged when unexpected expenses arise, but don’t let setbacks defeat you. Instead, take a moment to re-evaluate, adjust your plan, and stay positive. Prioritizing your finances now will set a productive tone for the rest of the year. Set your financial goal for the New Year today!

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