As we head to the beginning of a new year, we countdown, excitedly awaiting the ball dropping and thinking of all the next year holds in store for us. Or, if you are like me you go to bed early because you know your kids will be up at 6:30 am.
Either way, a new year brings along new resolutions or goals and hopes of how we can improve in our lives. For many people, one of those goals has to do with finances and you better believe I’m here to talk all about financial goals and how to establish habits to help those goals happen.
How to create realistic goals
Make the goal achievable - Don’t start out the new year saying you are going to save $20,000 if you are currently living paycheck to paycheck and don’t have a huge raise coming. Look at what is possible for you and in your control. The more likely you are to win, the higher the chance you will keep practicing these steps.
Example 1 - “I will create a budget that includes saving ______ each month.” That amount may be $100 or $1000 per month but make it something that is actually possible. You can only do this once you have a budget in place. Maybe a better goal would be.
Example 2 - I will create a monthly budget that includes all my income, expenses and savings.
Describe the steps to help this goal happen. - You need to list out what you need to do in order to achieve this goal. The easier the better! Make it easy to win!
Example 1 - “I will create this budget that includes saving _______ each month using the Every Dollar app. Then I will make automatic deposits from my paycheck into my savings account in order to simply this goal and make it happen.
Example 2 - I will create this budget using the Every Dollar app and will pay for the upgraded version so it automatically enters my expenses every month.
Make it hard to fail - Put things in place to make it hard to fail at this goal.
Example 1 - Automatic deposits basically guarantee that you will make this goal happen. It would be hard to change this step. You would have to talk to the person and fill out a form to stop these automatic deposits into savings. This is success because it’s now easier to win than to fail!
Example 2 - I will get someone to hold me accountable to sticking to my budget and I will check in with them weekly via text. I will only carry cash if I'm going shopping so I stick to my budget. I will put my credit cards in the safe so I stick to my budget and am not tempted to overspend. Having an accountability person makes it harder to fail because you are now answering to someone outside of yourself. Only carrying cash for in person expenses makes it harder to overspend because you can only spend what you have in hand.
Tell someone about your goal - This helps you give action to your goal and adds to the commitment level. Extra points if you ask that person to check in on your progress next month.
As you head into the New Year, I want you to take 10 minutes and pick one financial goal. Maybe you want to save 1 month's worth of expenses or pay off $7,000 of credit card debt. Write down a goal and write out the steps you need to take to make that goal happen. I’d love for you to message me and tell me your goal for the new year.
If you feel lost on your financial journey and need some guidance, encouragement and accountability, book a free consultation so we can chat and see if financial coaching would be a good option for you.
I’m cheering for you! You got this!
Heroes Financial Coaching