Every New Year’s Eve, people around the globe create resolutions to better themselves in the coming year. Financial matters consistently rank among these top self-improvements. Maybe it’s saving more money, reducing debt, obtaining a higher-paying job, or buying their first home.The desire to improve oneself is admirable because it allows you to reach for a goal and work to obtain it. However, the challenge is achieving that goal. Too often, resolutions are deemed overly difficult and abandoned a few weeks into the new year.
In this article, we’ll highlight how to set financial goals with intention, devise a plan to achieve them, and provide tools to accelerate your progress and boost your confidence.
When setting New Year’s resolutions, financial or otherwise, it’s important to realize that success won’t happen overnight. Anything worth achieving requires a plan, hard work, and commitment.
Before you jump right into pursuing a new goal, take time to plan thoroughly. Use the following tips to help you get started:
Be Intentional
Ask yourself what goal is most important to you. Why does it rank high with you? Continue to ask yourself “Why?” several times to uncover your true goal.
For example, you might state your goal is to “save more money.” Why do you want to save more money? Is it for a specific purpose, like a new car or summer vacation? Are you tired of living paycheck-to-paycheck? Do you spend frivolously and impulsively? All these answers can help tailor your goal.
For example, you might state your goal is to “save more money.” Why do you want to save more money? Is it for a specific purpose, like a new car or summer vacation? Are you tired of living paycheck-to-paycheck? Do you spend frivolously and impulsively? All these answers can help tailor your goal.
Being intentional with your goals is the first step to identifying the process you need to take to achieve them.
Get Specific
You’re more likely to accomplish a goal if you are specific in what you hope to achieve. For example, instead of just saying, “I want to save more money,” work to identify the amount, reason, and timeline.
“I will save $5,000 by August 1st as a down payment on a new car.”
“I will save $5,000 by August 1st as a down payment on a new car.”
Remain Realistic
Setting unobtainable goals will only cause you to give up quickly. If you want to save $5,000 in a few months but only have $100 leftover monthly, you’ll likely ditch the goal after the first several weeks.
Review what you want to accomplish and the timeline you set for yourself. Just as it’s extremely difficult to lose 30 lbs. in a month, you don’t want to set the bar so high that it’s impossible to reach.
Review what you want to accomplish and the timeline you set for yourself. Just as it’s extremely difficult to lose 30 lbs. in a month, you don’t want to set the bar so high that it’s impossible to reach.
Devise a Plan
Once you have intentionally set a specific and realistic goal, it’s time to create a course of action. How can you accomplish this goal within the timeline you set? Often, there are multiple means to advance a goal.
For example, assume you set a goal to save $250 each month for 6 months. However, you only have $150 leftover monthly to save. Look for opportunities to make it possible. Perhaps you can reduce your expenses by $50 a month. Maybe you can perform a freelance job monthly and bring in an extra $50. If you have outstanding loans, improving your credit score could allow you to refinance at lower rates and reduce your monthly payments.
Explore all opportunities surrounding your desired goal. Then, create an actionable plan to ensure it’s achievable.
Explore all opportunities surrounding your desired goal. Then, create an actionable plan to ensure it’s achievable.
Instead, find ways to hold yourself accountable. Teaming up with a friend or family member is a great way to start. If you have a gym buddy, you’re more likely to go so that you don’t let your friend down. It’s the same with financial goals.
If your friend is working to save money, encourage one another and have weekly check-ins. When you hang out together, make intentional decisions to avoid costly entertainment like dining out or splurging on frivolous stuff.
If you’re trying to lose weight and you go out with friends and have a cheat meal, you shouldn’t give up hope. Review what happened and find ways to avoid that situation in the future. Perhaps, if you know you’re going out with friends, you look at a menu ahead of time to ensure your meal fits within your eating plan.
It’s the same with financial goals. If you cannot meet your saving goal that month, how can you make it up? Is it possible to move your timeline out a bit further? Are there any additional expenses you can cut? Can you take on extra hours at work to make up for the difference?
Remember, your goal is progress – not perfection. There will be setbacks, but how you approach them is what matters most.
Tools to Achieve Your Financial Goals:
You don’t have to work alone when trying to achieve financial goals. There are many tools and programs in place that can give you a leg up or a head start. Here are a few examples of how the credit union can bolster your financial resolutions:
You don’t have to work alone when trying to achieve financial goals. There are many tools and programs in place that can give you a leg up or a head start. Here are a few examples of how the credit union can bolster your financial resolutions:
Debt Consolidation:
Debt consolidation is one of the easiest and quickest ways to put more money back in your pocket. People often assume debt consolidation is only for those with significant credit card debt. However, that’s not true.
Debt consolidation allows you to transfer high-interest credit card or personal loan balances to a lower-rate credit union credit card or personal loan. The process immediately saves you money with lower interest payments. Plus, you’ll only have one monthly payment to manage – simplifying the process and improving your credit score simultaneously.
Savings Accounts:
Debt consolidation allows you to transfer high-interest credit card or personal loan balances to a lower-rate credit union credit card or personal loan. The process immediately saves you money with lower interest payments. Plus, you’ll only have one monthly payment to manage – simplifying the process and improving your credit score simultaneously.
Savings Accounts:
When saving money, using the proper account can make all the difference. The credit union offers a variety of savings options, including these popular choices:
- Regular Savings/Wish Account: A general account that allows you to quickly and easily transfer money into and out of your checking account. It’s a convenient tool to use when beginning to build your savings.
- Christmas Club Account: The Christmas Club is a great budgeting tool for saving for the holidays, winter heating bills, and property taxes. This account automatically transfers to your regular share savings account on November 1st of each year.
- Term Share Certificate Account: Certificates force you to save by locking up your money for a designated timeframe. UCFCU Term Share Certificates can be set up on 6, 12, 24, and 36 month terms. The minimum deposit for a UCFCU Term Share Certificate is only $500.
Automation:
The best way to ensure you stay on track with your financial goals is to automate the process. Consider scheduling automatic payments via Online Bill Pay to keep your credit score up and never miss a payment.
If you want to save regularly, Payroll Deductions and Automatic Transfers will be your best friends.
- Payroll Deduction automatically transfers a set amount from each paycheck into your emergency fund, providing a completely hands-off approach to saving.
- Automatic Transfers function like payroll deduction; however, you choose the date the transfer takes place. It could be the first of the month, a specific day, etc. – you’re in control.
Obtaining your financial resolutions in the new year stems from your ability to set intentional goals that are both realistic and specific. From there, you can devise a plan to tackle your objectives and add tools to simplify the process. Remember, your goal is progress, not perfection.