Three Ways to Make Progress on Your Financial Goals in the New Year

A new year is just about here, and with it comes the list of well-intentioned resolutions. Money goals can be particularly challenging, because they tend to come with strong emotions like anxiety or confusion.

If this is how you feel about your finances, you might not know where to begin. There is a way out, however. You can make meaningful progress on your financial goals in the new year using three tactics I’ve seen work time and time again.

1. Think strategically.

Realistically, you probably won’t get everything done. And all of your goals are probably not equally important anyway. The key here is to ask what progress you can reasonably make on the most important aspects of your finances.
A comparison to physical goals may be helpful. Everyone wants to get healthier and more physically fit. But rather than set a dozen hard to reach milestones for yourself, it can be more helpful to identify the one or two things that will benefit you the most. For instance, I am much better at working out if I go to bed consistently at a reasonable time. So my strategic physical resolution would be to be in bed every weeknight by 10:00pm. This one change would make it much easier for me to improve other areas of my physical health.

Thinking strategically for my own personal finances this year meant revisiting “worst case scenarios.” My wife and I had to update our answers to questions like:

• “What happens if I’m disabled and can’t work?”
• “What will happen to my kids if my wife and I both pass away?”
• “How much life insurance do really I need?”

What’s most strategic for you is probably different. For many people (of all incomes) it could be having better awareness of spending (aka “budgeting”). Others have never really sat down and figured out what they need to do to reach their retirement goals. You may need to focus on that career shift you’ve dreamed about.

2. Give yourself one task per month for the entire year.

Resolutions are notoriously short-lived. So the key to actually making meaningful progress is to plan your course over the next 12 months.

In each month of the new year, give yourself one specific task needed to make progress on your strategic goal. Pick only one thing each month, and make sure the task is specific. You have to know when you’ve completed it.

For example, in keeping with my past year’s strategic theme, my goal this past March was to request a term life insurance quote. That’s it. I didn’t even set the goal of getting the life insurance, just doing the one thing I needed to in order to move the ball down the field. In May, it was to update Disability Insurance through a professional association. In November, it was setting an appointment with my estate planning attorney to talk about the updates needed to our estate plan. You get the idea.

Your January task may be to just plug in your bank accounts to a tracking site like www.Mint.com. Your February task may be to log back in and categorize last month’s expenses. Or you may need to update your resume.

It may be harder than you think to limit yourself to just one task per month. But just focus on the one thing you can do next. You’ll be surprised with how much you’ll get done at the end of the year if you focus on small but meaningful ways to take single steps each month.

3. Find some accountability.

Like all goals, we get more done when we do it together. So tell someone else your plans and ask them to help you do it. This could be your spouse, a close friend, or a parent.

It may be time to talk to a financial planner. A good advisor will help you figure out what strategic looks like for you, then will help you actually get things done. If you’ve been wandering in a wasteland of financial doubt, this year may be the year to get professional accountability.

Your resolutions don’t have to die in early January. The frustration, angst, or wavering can be banished. Make the progress you want to make by thinking strategically, tackling one thing each month, and by finding someone to help you along the way.

< Back to Updates