It’s 12 days in already and 2021 has been off to an interesting start. For starters, this post that should have come out last year is coming out twelve days into the year, loool. Well, well, let’s get to it already, shall we?
Tips on setting financial goals for the year
- Be realistic: don’t set up more than you can actually do. Challenge yourself as much as you can but don’t set a goal that you know you most likely can’t achieve. To set a realistic goal, I suggest drawing up a budget and incorporating your savings goal into your budget.
- Be specific: Set a definite dollar figure. As attractive as ‘save $500-$2000’ this year sounds, you are working with a huge range and this isn’t specific enough. Which is it, $500, $2,000 or somewhere in the middle.
- Define what your goals are for: Are you saving towards your emergency fund, travel fund, a home, investments? Break down your goals based on categories. Instead of saying “Save $5000 this year”, you could consider saying “Save $2,000 towards my emergency fund, $1,000 towards my travels and invest $2,000 in the stock market”
- Break it down: While it is important to have a big goal for the entire year, smaller goals could make it easier to achieve your goal on a regular basis. That said, you can have an annual goal but break it down to monthly goals. For example ‘Put down $10,000 towards my retirement fund could be put down $833.33 monthly into my retirement account’.
- Have an incentive or a why: This will help you on days or periods that may challenge you from getting to your goal. Your why could be a failure of being broke or not having money or buying a property in the next few years. Whatever it may be, have a why!
- Have someone hold you accountable: Accountability is so important when it comes to achieving your goals because now you have someone keeping tabs on you to ensure that you actually will do what you have set out to do. Here are a few ways to go about getting accountability with your goals- ask a trusted friend, join a challenge, have a money coach, or share your goals on your social media. I remember once a few years ago I shared on social media I was not going to eat out for the entire month. When I went out to eat, I had a friend reach out to me to ask me why I wasn’t keeping to my words.
- Don’t be scared to talk about your financial goals and money with your friends and family: This doesn’t only tie in with the point above on accountability, it also helps your day to day life. If you are open about your financial goals with your friends and family, chances are that they will be more understanding about decisions you make that are in line with your goals, they could also provide guidance and tips too.
- Be flexible with your goals: Set them but also keep in mind that life could happen and be willing to make adjustments as you see fit. I recommend you only do this if you don’t have a choice.
- Set a timeline: Change the ‘I’m saving for a house” goal to “I’m saving to buy a house in the next 3 years”. If you can see it in the near future, it becomes more realistic to you and you will be more motivated to achieving the goal. Set a timeline on your financial goals.
Finally, enjoy the process. Reward yourself with little treats and celebrate your mini milestones!
I hope you enjoyed this post. I’ll be sharing more on investments, savings and global economies in the next post.