There have been many terms used to describe this past year. The most common of which being “unprecedented”. As the year turns over, many of us are looking forward to 2021 being a new year full of possibility and new beginnings. Even more so than in years past. While this positive outlook is a good thing, there is value in taking the time to reflect on 2020 in an effort to warm yourself up before setting new year financial goals.
Some question you may want to ask yourself:
- What did I learn over the past year?
- What am I proud of from the past year?
- What could I have done differently?
- What changes can I make going forward?
Be generous with your time and consider writing down the responses. You may discover some small adjustments to make in the new year. Perhaps you were caught off-guard with unplanned expenses, an early retirement, or market movements last year. You may wish to shift money around to ensure you have enough emergency savings. Beefing up your emergency funds may also give you comfort if you tend to get anxious watching your retirement investments move up and down.
You may also have your eyes set on larger goals that you are not sure how to tackle. You may be considering the option of paying down a mortgage, downsizing your home, etc. Below are some financial goal-setting tips as we move into a new year.
Tips for Creating New Year Financial Goals
Start with your “why”. What are your motivations? They can be positive, negative, or both. Maybe you wish to increase your feeling of financial stability or build flexibility into your finances. You may want to explore the option of early retirement and establishing certain new year financial goals could help in that quest.
Prioritize a list of tasks to be done. Breakdown the daunting goal into bite-sized, attainable pieces and make sure to be realistic. You may even want to give yourself a few easy, slam-dunk tasks to ensure progress and stay motivated
Maintain accountability. Determine a way to stay accountable to your new year financial goals. Consider setting a milestone deadline. This could be a birthday, change of season, an anniversary, or other significant date by which you wish to attain your goal. Writing down your goal, perhaps in multiple places, can help as well. The visibility of your goal on a regular basis as well as setting up reminders for yourself can help keep you accountable. Finally, talk about your goal out loud. Whether it is with your spouse, friends, or your financial advisor.
Celebrate the wins! Make sure to acknowledge what you have accomplished and not just how much further you have to go. Consider treating yourself periodically as you make progress towards your new year financial goals.
For more on these four goal-setting steps, check out this Coffee with Katie recap.
I would love to hear your ideas for new year financial goals. If you have stories or comments you would like to share, please feel free to reach me at firstname.lastname@example.org. I would love to hear from you!