Setting Financial Goals for the New Year
Welcome to 2025! If you didn’t set up your plan for this year yet it’s the perfect time to evaluate your financial progress and plan for the future. Setting financial goals can feel daunting, but with the right approach, you can start the year strong. We suggest the following methods to help you set goals that will help you stay motivated and on track:
1. Review the Past Year’s Budget
Start by reflecting on this past year. What financial strategies worked for you? Where did you fall short? Highlight your successes to build on them, and identify areas that need improvement to avoid repeating past mistakes.
2. Set SMART Goals
Your financial goals should be Specific, Measurable, Achievable, Relevant, and Time-bound. For example, instead of “Save more money,” set a goal like “Save $5,000 for an emergency fund by June.” This clarity will guide your actions and keep you accountable.
3. Break Goals into Quarterly or Monthly Milestones
Large goals can be overwhelming. Divide them into smaller, manageable steps. If your aim is to save $5,000 by June, break that into monthly or quarterly targets. Celebrating these smaller wins keeps you motivated and reassured that you’re on the right path.
4. Create a Vision Board
A vision board can help visualize your goals. It might include images of a dream home, a paid-off credit card, or a vacation. This tangible reminder of what you’re working toward can inspire you on days when motivation wanes. Vision boards can be digital or physical and a fair bit of fun to make!
5. Incorporate an Accountability Partner
Partnering with someone who shares your commitment to financial progress can make a huge difference. Share your goals with a friend or family member who can encourage you and celebrate your achievements together. Break the taboo of talking about money! Shout your goals from the mountaintops! Recruit friends to support or join in your goals!
6. Do a 90 Day Forecast of Sinking Fund Expenses
Know you’ll need new tires in February? Or you’ve got an out of town wedding in March? The time to forecast this is now! A forecast is simply a brainstorm- take a look at your calendar and see what you have coming up for the next 90 days that isn’t captured by your budget. If you see something, note how much it’s anticipated to cost. Tally up your sinking fund expenses and compare it to how much you currently have in your sinking fund. Do you have enough? If not, make sure you’re planning on sending enough money each paycheck to cover everything you have coming.
