A lot of us typically use New Year’s for setting new years resolutions. The new year is a great time to reassess your financial goals and make changes so you can get where you want to go, whether you are paying off debt, building an emergency fund, or saving for the future. Financial goals look different for everyone and establishing the goal is only the beginning. The real work starts once you have to make decisions about how to achieve those goals.
So let’s get right to it. If you want to make long-lasting financial resolutions, you have to include a certain level of detail in your goals.
What Are Financial Goals?
Financial goals are savings, investment, or spending targets you hope to achieve over a set period of time. The stage of life you’re in usually determines what type of goals you wish to achieve. Below are four tips that will help.
1. Know Where You Are
Setting financial goals is important l, but before you can set any goals, you need to know where you currently are. Look through your savings, debts, and investments. Assessing your financial status may be frustrating, but gaining this knowledge will allow you to set realistic goals for the year.
2. Figure Out What You Really Want
One of the hardest parts of setting goals is figuring out what you really want. When you set your financial goals, be sure you’re choosing something that has meaning for you. Goal setting can be a stressful process if you don’t align your goals with what you truly desire. Make sure you choose financial goals that set you up for the future you want.
Also, be sure to pick only a couple goals to work on at a time. Don’t spread yourself thin, you’ll have a hard time remaining focused.
3. Create Smart Goals
Apply a SMART- goal strategy. That is, make certain your ambitions are Specific, Measurable, Achievable, Relevant, and Timely. SMART. If a goal meets these criteria, it is likely that you will be able to make progress towards achieving it. Break down a large goal into mini-goals with shorter deadlines and six-month milestones to track your progress. Once you have specific and measurable steps toward that large goal, it’s easier to keep the momentum.
Decide if your goal is short-term, mid-term, or long-term, and create a timeline for that goal. This may change at any time based on your situation.
4. Maintain Your Goals
Once you’re satisfied with your financial goals, it’s time to implement them and monitor your progress. If you need help deciding which goals are right for your situation or thinking about financial planning, we recommend talking to a Certified Financial Planner (CFP) or financial advisor. Your financial advisors can help you meet your short-term financial goals and your long-term financial goals with their expertise. Monitor your progress. Make sure that you are hitting certain benchmarks. If not, take some time to re-evaluate what you are doing wrong and make changes
Financial Goals to Consider
Here are some common financial goals that many people like to add to their list
Create a Budget
Most experts agree that budgets are useful. A detailed budget can help you meet your spending and savings goals. It is a short-term goal with long-term implications. Creating a budget is a great way to know your financial limits.
Build an Emergency Fund
Many financial experts recommend having at least three to six months of cash saved to cover your regular expense. In a fragile job market and economy, emergency funds are essential. Emergency funds are commonly used to fix a surprise car repair, pay for a hospital stay, the mortgage, and a variety of other unforeseen issues.
Working on paying off debt is one of the key steps to financial freedom. Work with your bank or lenders to make sure the terms of your loans are the best they can be and you have a plan to pay them off. Also, see if consolidating your debts would be a better move for you.
Save Money for Retirement
You can save for retirement with many different types of accounts, including an IRA, a Roth IRA, a 401(k), and even an HSA. All of these accounts offer some type of tax savings, which can help you save even more money. Making retirement saving a priority, your future self will love you for this.
Goals will lead to your success and once you get the goal-setting process figured out, you’ll be surprised at just how much you can achieve! And once you are clear about what you want, you’ll be able to prioritize and set timelines for when you want to achieve them.
Setting your financial goals is a great step, but make sure you create a plan. Assess your money mindset and apply a SMART strategy to reach your goals. After setting your financial goals, it may be tempting to set them and forget them, make to monitor your progress, and refresh them as needed.
What financial goals for 2022 do you have in mind?