How To Set Financial Goals You'll Want To Stick To
It’s hard to believe that a new year is upon us. But this January marks more than just a new year, it brings a new decade as well! The allure of a fresh start gets many people excited and ready to make healthier choices for themselves and the people around them. This often leads to creating a laundry list of resolutions—things we want to change or alter about ourselves to help us reach a certain end-goal.
But as you know, either by proxy or first-hand experience, resolutions don’t always work. In fact, nearly 80% of people who make new year’s resolutions break them by mid-February. So why do we start each year with a statement, wish, or promise that will most likely not get us through winter?
Resolutions come from a place of positivity and introspection. They are a catalyst for change but perhaps aren’t the most efficient vehicles to help us get there. This year, you can do something different. You can change your resolution into something that can help you make the change you wish to see: a goal.
Turn a resolution into a goal
A resolution is simple. It is a decision to either do or not do something. A goal, on the other hand, is more complex. A goal is the object of a person’s ambition, it is their aim or desired result. A resolution is something you do (well, for only 8% of the year at least) and a goal establishes a pattern of behavior to help you reach a result.
When you start to set new goals for yourself, you are working toward a larger purpose. This ideal helps you set big-picture goals knowing that it will take time, dedication, and attention to get there. This is what sets goals apart. By nature, they are something to be worked toward. They aren’t a quick fix, rather they ask more from you.
This difference can make a huge impact on the way you think about your finances. For example, some people make a resolution to spend less in a given year. This is an arbitrary statement, one that doesn’t have a purpose behind it. Instead, ask yourself some questions to help get at the root of the problematic behavior you wish to change.
What areas in your life are you overspending?
Do you know of any large expenses coming up?
How can you plan for your spending in a more comprehensive way?
Making a resolution like the one above doesn’t work because it fails to answer these and other questions about the larger implications. If you decided to create a goal, however, to revamp your budget by saving an extra $50 each month for gifts so you don’t overspend during the holidays, you are establishing a healthy pattern for you and your finances.
Creating financial goals is an important part of your financial plan. As you work to create your goals for the new year, think about the things that are coming up in your life. What do you want to work toward this year? What financial resources will be needed to help you reach your goals? Are there any changes you’ll need to implement to help you get there? The most important thing is that you don’t create your goals in a vacuum. They need meaning, value, and purpose.
Give your goals a purpose
Creating a goal for yourself isn’t enough to help you establish healthy patterns with your finances. When you create your financial goals, it is important to give them meaning and intention. Your goals should be specific and particular to your life. As you create your goals, take some time to think through how they answer the following questions:
What are your core values?
How are your goals aligned with those values?
What areas of your financial life could be improved by refocusing them on the people, places, and things that mean the most to you?
In what ways will reaching these goals enrich your life and the lives of others?
By creating goals that answer these questions, you are bringing an added level of intention into your financial life. When your financial habits are aligned with your values, you will be more likely to make smart, positive choices that help lead you to your goals.
When talking about setting new goals, many people are concerned about sticking with them and one of the best ways to stick with your goals is by creating them with the intention behind them. That intention will help give you the motivation you need to make the choices that will help you reach them.
Create your goals together
Remember, your financial goals shouldn’t be created in isolation. Include your spouse or your loved ones as you set and work toward your goals. When you work together, you will each be able to help and support each other throughout the journey.
Along with your spouse, you can also make your goals with your financial planner. As you think about what this new year will bring, you may realize that working with a professional is the right move to help you get your finances where you want them to be.
Just like someone who wanted to get in shape but didn’t know where to start may hire a fitness coach, someone who wants to get their finances in order but doesn’t have a clear direction would really benefit from working with a planner. A planner can help give you the tools you didn’t even know were there and can provide you with the resources and support to set, reach, and stick to your financial goals.
Here at Step by Step, we believe that cultivating good financial habits will help you reach your goals. We would love to work with you to help you discover your goals and carve a path to reach them. Set up a time to talk to us, we can’t wait to hear from you!