Lose weight. Travel more. See friends. Find “Me Time.” January 1 is a great day to reflect on the past year and set some goals for improvement 2022.
Now, if your resolutions are to eat better or go to the gym more often, there might not be much we can do to help. But for many of us, 41% according to the research data and analytics company YouGov, we vow to make better financial decisions and save money in the New Year.
That’s where this blog can help. Setting and working toward lofty money goals are great ways to help your future self.
Kick start your best financial year ever with these tips to achieving your money goals:
Most New Year’s resolutions crash before the calendar even turns to February. Study after study tells us that around 80% of New Year’s resolutions will get abandoned after the first month. And a big reason for that is because those goals are too lofty.
So, how can we avoid becoming one of the 80%? By being SMART.
That means having Specific, Measurable, Achievable, Realistic, and Timed goals.
A resolution of “Saving More” doesn’t work because it’s not specific. Neither is having $2 billion in your savings account by the end of the year. (Unless you’re Jeff Bezos, that’s unattainable.)
So start with something realistic. Maybe you want to have $2,000 more in your savings by December 2022. That’s a Specific number that can be Measured month to month. Depending on your income and financial situation, it can be Achievable and Realistic. And it has a set Time limit on it.
Adjust your goals based on what’s realistic for you, and you’ll be amazed at what you can accomplish.
You made the goal, now comes the hard part. Reaching that goal comes down to two things: making a budget and and saving for the future.
Whether you’re the CEO of Amazon or struggling to make ends meet, a personalized budget is always the best thing you can do for your wallet. That’s why we have so many great tips on making one.
Ask yourself where you can cut back on spending so you can build up your savings. A good rule of thumb is 50/30/20. That means putting 50% of your take-home pay toward the things you need (rent, groceries, necessities), 30% toward your savings, and 20% toward the things you want (concert tickets, shopping, etc.)
January 1 is a good day to examine your finances, but that doesn’t mean you should stop doing that on January 2. Make financial checkups a regular routine throughout the year.
Without regular checkups, you won’t fully understand what your progress looks like!
Schedule your financial checkups for once every two months, and see how you’re doing with your budget. If the numbers aren’t adding up, this would be the perfect time to adjust your plan as you see fit. If the numbers are looking good, then celebrate your success (no matter how small). This will keep you motivated throughout the year.
Not only is checking in important, but celebrating your success (no matter how small) is a fantastic way to keep yourself motivated.
Want more tips on how to get your finances to where you want them to be? Check out KOFE’s financial education tools. These resources are free for La Cap members and can help you achieve your financial goals for 2022 and beyond.