How To Set Financial Goals & Smash Them

It’s time to set ourselves up for the NEW YEAR!

Now before you roll your eyes, I am not a fan of the “new year, new me” talk either. Unfortunately, that “new me” often dies out before it even hits February. So I am not advocating for something that is unsustainable and ineffective. BUT I am a believer and doer of setting goals every single year. Goal setting is extremely useful as a compass to guide the actions/steps that need to be taken throughout the year to get you to where you want to be. Goals, when written down, also serve as a great accountability partner. Even if you don’t share your goals with anyone else, once you have written them down in black and white, it is can be a form of accountability to yourself because they are no longer just fleeting thoughts in your head but concrete goals on paper.
 
Important Considerations When Setting Goals
 
When setting goals, it’s important to make sure that you are real with yourself. I am all about positive thinking and positive mind-sets, but I believe it should be grounded with an ounce of reality. This is important because setting goals that deep down you know just are not in the pipeline for next year (does not mean that they won’t ever be), can discourage you if they are not achieved, and the last thing goals should do is dull your shine. Now this does not mean you should not dream big, but dream big practically.
 
So let’s get to business. Here are some things you should consider before you start setting goals:

1. Avoid new years’ resolution type goals – Do not set goals that are unrealistic and that will require a complete lifestyle change, e.g. “New Year, New Me” goals. If a goal requires you to have a drastic change in your daily routine (e.g. getting up 3 hours earlier than usual) then this could be unlikely to stick. Be realistic and gradually increase the goal over time. For instance, start with getting up 30 minutes earlier one week, and the following week increasing to 45 minutes earlier, and so on.
2. Quality over Quantity – It is far better to have 2-3 goals that are well aligned with your vision and are meaningful to your life, than 5-6 goals just to fill up a piece of paper and feel like you’ve got lots of #goals. Quality goals will be something you are passionate about and/or would make an impactful difference to your life once achieved.
3. Include 1 goal you have already partially achieved - I’ll admit this goal is a cheeky one! But, my reasoning behind this is all about psychology. You may or may not be one of those people who write a checklist and include a few things you have already achieved or very nearly achieved just so you can check off a few things from the get-go (I am definitely one of those people). When you feel you are close to achieving a goal or you have successfully achieved one, there is a burst of energy and motivation you get to continue working on your other goals. You also gain confidence in realising you are fully capable of achieving goals that you set yourself.

 
Examples of Personal Finance Goals for the New Year
 
Now that we’ve got those considerations out of the way, let’s talk about some actual financial goals that may work for you. The list below is not an exhaustive list as goal setting is very personal and unique to each individual. However, I wanted to provide some ideas to help get your creative juices flowing.

1. Start the year off reading 1 finance book – If you’ve never read a personal finance book, it’s a must! If you’ve read a few but you’re eager for more, then good for you. There is an abundance of finance books out there so there should be no shortage of finding one that you enjoy. If you don’t know where to start, I would highly recommend ‘Rich Dad, Poor Dad’ by Robert Kiyosaki. It is a great book to get you thinking about how you view money and helps you to consider new ways you can handle your personal finances.
2. Set your Budget for the first 3 months of the year – Budgeting is the foundation of good money management. And unfortunately budgeting still gets a bad rep and it does not need to. If the word ‘budget’ makes your skin crawl, think of it more as a conscious spending plan i.e. you being fully aware of where all your pounds/dollars/euros are going each and every month. By setting a budget for the first 3 months opposed to 1 month, you will hopefully get into a good habit of budgeting for the rest of the year. And if you are new to budgeting, I am confident you will see how much more effectively you can manage your money by delegating your money instead of it delegating you. I have a budget spreadsheet that I live by available on my Etsy store, so check out if interested: www.etsy.com/uk/listing/893604429/personal-budget-excel-spreadsheet-how-to?ref=shop_home_active_1
3. Write down your primary financial strategy/strategies for the year – Consider what is the main thing you wish to achieve for 2021. Is it to pay off debt? If so, how much debt are you looking to pay off and which debt needs to be tackled first? Is it to set up an emergency fund? If so, how much do you need to comfortably cover potential emergencies and where are you going to save this money? Is it to start investing? If so, how much do you want to invest per month and which investment platform do you want to use? Is it to save towards a home? If so, have you set yourself up to take advantage of government schemes such as help-to-buy or lifetime ISAs (LISA)?
4. Find your person for money motivation – A bit of a shameless plug here because I would love to be one of those people for you J but seriously, it could be anyone as long as you find someone you can resonate with. Make good use of your social media accounts and follow people who will give you some financial motivation throughout the year.
5. Set a monthly reminder to assess your progress – As they say, if you cannot measure it, you cannot improve it. If you have a set budget and financial goals, this would be an easy goal to achieve. Every month, set a date with yourself or your partner and sit and have a nice chin-wag (chat) about your finances for the month. This does not need to be a tense chat or even remotely unpleasant. I have heard some people say they do this over a cup of coffee or some cake, and they view it as more of a date than a formal meeting. Really, it’s about making it work for you. This monthly meeting is a fantastic way to assess what is working and what is not, and whether anything needs altering for the months ahead.

 
I hope there have been a few helpful nuggets for you, and I wish you every success and happiness in the new year. Let’s SMASH these goals!