It’s a new year, with new opportunities, possibilities, and brand new goals. Unfortunately, nearly 80% of New Year’s Resolutions1 fail by February. You heard that right, 80% of people make it less than two months before giving up.
This is due to a few reasons:
- Setting unattainable goals
- Setting unclear goals
- Not having a plan
- Feeling unmotivated
Fortunately, this doesn’t have to be you. We’re here to help you reach your biggest, best financial goals yet.
Welcome to 2020, the year you finally level up your finances. Let’s get started.
Some goals feel too out of reach to achieve, leading people to give up halfway through. Micro goals help prevent that. They’re small, task-specific goals that compound to reach your larger goal.
For example, if your goal is to save a few extra bucks this month, your micro goal might be to cook dinner at home tonight instead of going out to eat.
It might seem tiny, but checking it off creates motivation to keep going and keep reaching higher.
These goals are ones you want to reach ASAP. It could be today, this week, or even this month. They’re bigger than micro goals but won’t take extensive time, money, or energy to achieve.
For example, a short-term goal might be to buy coffee two times this month as opposed to twice per week. Cha-ching.
Long-term goals are goals you want to achieve eventually. They usually take quite a bit of time and energy, but are totally worth it.
For instance, a long-term goal might be to completely pay off your student loans before you turn 30. For a newly graduated 21-year-old, this can feel impossible. Which is where micro and short-term goals come in.
Now that you’re clear on the types of goals, let’s set a few you’re guaranteed to achieve (with a little work). To start, pick 1 or 2 from each section. Write them down somewhere you’ll read every day. Tailor them for your individual situation—that’s how goals work! And crush it.
Micro Money Goals
- Research banks with the highest interest rates on savings accounts
- Set up a savings account
- Automate your savings from your paycheck so you don’t see it
- Create a weekly allowance and stick to it
- Dedicate 1-2 brown bag days
Short-Term Financial Goals
- Create a budget and start tracking
- Deposit the money you saved from brown bag days into your savings account
- Cut back on unnecessary expenses (happy hour, shopping, or do you really need that iPhone 11? etc.) and use those savings to pay off debt or contribute to your 401(k) or IRA
- Check with your employer to ensure you’re contributing a good amount of money to your 401(k)—shoot for 10% or at least enough to snag the company match
- Hire a financial advisor to help you plan for the big things: retirement, taxes, college funding, etc.
Long-Term Financial Goals
- Completely pay off student and credit card debt
- Max out your 401(k) each year
- Open a Roth IRA and max it out each year
- Pay off your mortgage—or at least shrink it
- Open a life insurance policy especially if married or have children
- Give charitably to a cause close to your heart… also helps with taxes
All of these are achievable this year, we promise. Start small. Be realistic. And don’t go it alone—we’re here to help.
An example plan might look like this:
Micro goals: Start a savings account at a bank with a high interest rate. Brown bag it.
Short-term goals: Deposit saved money from bringing lunch to work into savings account or 401(k). Hire a financial advisor to help answer your questions and create an individualized plan.
Long-term goals: Max out 401(k) and open a Roth IRA.
As you can see, these goals build upon each other until you reach your ultimate goal: A large, secure retirement fund. Or being completely debt free.
Whatever your long-term goal, we’re here to make sure you reach it. For more info on how to make 2020 your best financial year yet, give us a call—we’ll bring the coffee.
1 Why New Year’s Resolutions Fail. Posted December 5, 2018. https://www.psychologytoday.com/us/blog/modern-mentality/201812/why-new-years-resolutions-fail