Achieve Your Financial Goals in 2019
With 2019 right around the corner, it’s time to start thinking about what we would like to achieve in the coming year. Many have goals pertaining to finances, whether it’s to save for retirement or a down payment on a home, build wealth through investment or reduce debt. In fact, more than 77% of Americans were expected to make a New Year’s resolution for 2018, and this trend is sure to continue as we head into 2019
Create financial goals you are sure to achieve
When we set goals, it is always with high expectations and good intent. However, a few months into the year, after the initial motivation is gone, many will struggle to stay on track. What we are missing is a solid plan of action to guide and motivate us so we stay on the path to achieving our goals. Here’s a plan to keep you on track:
1. Identify what you want. We often don’t reach our goals because they are not what we want, but what others say we should want. For example, you may feel compelled to focus on boosting your retirement savings because that’s what your peers or colleagues are doing; however, you’re actually more concerned about eliminating your credit card debt or paying off your mortgage. Although it’s possible for you to increase your retirement account contribution while you pay off debt, if creating a debt-free lifestyle is your goal, make reducing debt your top priority.
2. Assess your financial situation. Once you’ve set your priorities and know what you want to achieve this year, review your complete financial situation. Include your most recent bank, investment and debt statements and include other financial information you deem important. The objective is to obtain a complete understanding of your income and expenses so you can create realistic financial goals.
3. Set SMART Goals. When creating your goals keep this acronym in mind:
- Specific & Written
- Measurable in Progress & Completion
- Realistic in Time & Skill
Each goal states specific and written monetary amounts and the time frame in which you plan to achieve the goal. Example one takes the process a step further specifying a milestone to achieve in the first year in addition to the long-term goal.
4. Make a plan. Once you’ve specified your goal, create a plan to make it a reality. Instead of trying to create the perfect plan, focus on defining the activities you will do to reach your goal.
5. Place a visual reminder of your goal in sight. Having your goal in clear view daily is a powerful reminder and motivation for what you want to achieve.
What do you track to achieve your goals
- A budget. A budget will provide a visual representation of your spending activities, income and expenses. If you’re looking for ‘extra’ money, identify ways to reduce your expenses, specifically non-essential expenses that tend to add up, such as frequent restaurant dining, online shopping splurges, etc.
- Expenses. Closely tracking your expenses helps you commit to your budget and ensures you have extra money to apply toward reducing your debt or increasing your savings.
- Defined steps to achievement. Create a specific plan with defined steps to achieve your goals.
Experience a Setback? Don't give up!
It’s normal to face challenges, such as an unexpected bill or home repair, a job loss or another change in your circumstances. It’s tempting to give up. Instead of quitting, adjust the time frame in which you expect to reach your goal. Although it may take you longer, you have a better chance of achieving your goal than if you just quit.