Around the new year is always a time to reflect on what you’ve accomplished this year, and consider what you are grateful for. And, of course, as so many of us do this time of year, it’s also time to set new financial goals.
Whether you are setting new frugal goals for the new year, or whether you have other financial goals, the key to succeeding is setting achievable goals.
Set Goals You WANT to Accomplish
Think about your financial priorities. What is it you actually want to do? What financial achievement will help you feel satisfied with what you have accomplished? Whether it’s paying down debt, or building your emergency fund to a certain level, going on a family vacation, or reaching your maximum in contributing to your IRA, the important thing is to first decide what you want to accomplish with your money.
You will be more likely to follow through if you want to accomplish your goals. Make it a point to choose goals that reflect your values, and that you will enjoy working toward.
Your goals should be measurable. That is one of the great things about setting financial goals; it’s fairly easy to track your progress. You can see your debt reducing each month. You can also watch your emergency fund grow, or see the results of your home down payment fund as it increases in size. You can keep up your efforts by creating small rewards along the way to mark certain milestones. Have a small celebration by buying a treat or doing something fun to mark reaching certain points in your progress. This will encourage you as you see results — and as you enjoy the rewards.
Breaking down your goals can also help you as you measure your progress. Create a plan for achieving your goals, breaking down each goal into smaller goals that you can achieve in one to three months’ time. That way, you will have regular intervals of accomplishment to keep you excited about working toward your financial goal.
Consider Setting Only One Goal at a Time
Realize, too, that you don’t have to set a whole bunch of goals at the beginning of the year and try to work on them all at once. Instead, you might be better off focusing on one financial goal at a time. Decide on the most important thing you want to accomplish with your finances, and concentrate on that first. Once you have accomplished that goal, create a new financial goal to work on. There’s no need to set financial goals only at the beginning of the year; you can set new goals year round.
The important thing is to make progress. Focusing intensely on one goal at a time might actually help you accomplish more in the long run. Consider your situation, and determine whether or not you are best served by paring down your goals. It might be less stressful, and provide you with a way to find success in achieving your financial goals.