Tis’ the season to set some big goals! With the new year comes new potential milestones, especially those concerning your budget. Most people think about their bank account when coming up with New Year’s resolutions.
If you want to finally achieve your financial goals, you have to start with the goal itself. Here are 7 ways to hit the mark in 2016:
1. Understand Your Values
Your goals need to resonate with you and your values if you have any hope of sticking to them. Avoid setting goals because you think it’s something you should do.
Try to find your big-picture dreams and use that as a framework for your resolutions. Whenever you feel yourself veering off course, this will help you put aside that meaningless expense to save for your big life goals.
2. Work as a Team
If you’ve fallen off track year after year, don’t get down on yourself. Get an accountability partner instead.
Recruit your spouse, money-savvy friend or a financial professional to help get your money in order. A fee-only financial advisor can be an invaluable resource in helping you identify important goals, creating an action plan and holding you accountable as you progress.
3. Make SMART Goals
One reason so few people achieve their “spend less, save more” goal is its simplicity. A goal that vague doesn’t give you any guidelines to measure your success along the way.
S.M.A.R.T. (specific, measurable, achievable, realistic, time-bound) goals are easier to stick to because you have a roadmap to get you there. Actionable S.M.A.R.T. goals include the following:
Specific: Narrow your goal as much as possible. A clear-cut goal allows you to visualize and take the appropriate steps.
Measurable: Set mini-milestones as you go so that you know you’re on the right track.
Achievable: Don’t make your goal too lofty. It should take some effort, but not be so out of reach that you give up before you really try.
Realistic: “Win the lottery” is not a good goal to set for yourself. Also, make sure you take the potential risks and changes in your life into account. Avoid setting goals that will only work out in the best-case scenario.
Time-bound: Give yourself a deadline. This can be as strict or fluid as is necessary, but don’t let yourself slide too much here. Only change deadlines if it’s absolutely required.
4. Visualize Your Financial Goals
Create visual representations of your goals. Whether you’re paying off debt or saving for a house, find images that immediately remind you of your goal.
Put them wherever you’ll see them often. That could be in your office, on your fridge, or even folded up in your wallet right in front of your credit cards.
5. Create a Budget
The budget is the backbone of any financial goals you plan to set. You need some way to keep track of what you’re spending and how much you’re allowed to spend in different areas.
Create a spreadsheet, download an app, or label envelopes and fill them with cash for your monthly spending. Whichever method works for you, a budget will keep you on track.
6. Keep Things Bite-Sized
Don’t get so amped up on New Year’s celebrations that you set your sights sky high. Think about the financial goals you have achieved, as well as the ones you’ve missed. Look for where or when you tend to veer off track.
That will help you set your sights on goals you can achieve. You can also break down your goals into monthly, weekly or even daily checkpoints. Do whatever you need to do to make this the year you can check that resolution off your list.
7. Put Your Financial Goals on Autopilot
If you’ve ever looked at your income over the past year and wondered where all your money went, there’s a good chance it was eaten up by lattes, drive-thrus, or impulse buys. It’s those little things that can really kill a budget.
One way to correct that is to automate your payments and savings contributions, so that a portion of your paycheck is immediately going where you want it to.
If that money isn’t sitting in your account, you can’t spend it mindlessly. Without doing anything other than setting up that one time automated transfer, you’re accruing savings where they need to be.
There are endless opportunities to improve your financial health, but the key to getting there lies in the baby steps that seem small along the way. Make this the year you finally check every resolution off your list.
About the Author: Heather Swick is an author, freelance writer, and editor who has worked for news outlets, national magazines and blogs. She is driven to help others achieve their career and financial goals and share her own experiences along the way.