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Five Simple Tips for Setting Financial Goals in the New Year

With the new year right around the corner, it is a perfect time to reflect and plan for the future – especially regarding your financial goals. As Antoine de Saint-Exupery once said, “A goal without a plan is just a wish.”

So, how can you stop wishing and start achieving your financial goals? Here are five simple tips for setting goals in the new year.

Give Yourself a Financial Check-Up

You cannot set reasonable goals without an awareness of your current financial situation, which is why you should give yourself a “financial check-up.”

During your check-up, be sure to review your:

  1. Credit report

  2. Credit score

  3. Debt

  4. Bank accounts

  5. Emergency fund savings

If you have trouble finding time to assess your finances, schedule an appointment in your calendar as you do for any important task. If you are married and have combined finances with your spouse, make sure you set a time when both you are your partner are available.

Explore Your Financial Goals

After assessing your finances, it is time to do some big-picture thinking. Here are a few questions to help uncover your financial goals:

  1. What do I want out of life?

  2. What drives me?

  3. What are my values and priorities?

  4. When I envision a happy and fulfilling life, what do I see?

Everyone’s idea of a happy, fulfilling life will look different — which is why it is crucial to explore these questions before setting financial goals.

For example, some people may want to live a simple family life — their financial goal might be buying a home. Others may wish to travel for an extended period of time or start a business —their financial goals could be saving up to take a sabbatical or to get their business off the ground.

Create or Review Your Budget

If you want to set and reach your financial goals, you must budget your money. Do not think of budgeting as a way of restricting your spending, but as a tool to help you achieve your goals. A budget helps direct your money towards the things that are most important to you and limits spending elsewhere.

Organize Your Financial Goals

Now that you have gained clarity on your financial goals, it is time to get organized. A common way to organize your goals is to separate them into buckets according to whether they are short-term, mid-term, or long-term goals.

  1. Short-term goal: Goals you plan to achieve in one year or less

  2. Mid-term goal: Goals to be accomplished within two to five years

  3. Long-term goal: Goals five years or more in the future

If you do not organize your goals, you may lack focus because you do not have a set deadline in mind. Creating a timeline makes it easier to create a plan and stick to it.

Be aware that even though a long-term goal is several years away, you will likely need to start taking steps now. For example, if you have a goal of purchasing a home in six years, you will likely need to start saving now to achieve that goal within the desired timeframe.

Financial Goal Examples

Financial goals look different for everyone. A few examples of common financial goals include:

  1. Buying a home or investment property.

  2. Paying for college.

  3. Saving for retirement.

  4. Purchasing life insurance to protect your family.

Monitor Your Goals

Once you set and organize your financial goals, do not forget to monitor your progress. Come up with a goal-tracking system that works for you, such as a spreadsheet or notebook. If you do not track your progress towards your goals, it will be challenging to know whether you are on track to achieve them.

Final Thoughts

The new year is a perfect time to assess your finances and set financial goals. By following the steps outlined above, you will be able to achieve any goal you set your mind to!


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