New Year, New Financial Goals

The start of a new year often inspires a fresh start. As calendars reset, so can your financial goals. Whether you’re an experienced planner or just getting started, we have practical tips to help you move forward with your financial goals.

When setting your goals, whether they are just one or a whole list, there are a few things to consider. Make sure they are specific, measurable, achievable, relevant, and time-bound, also known as SMART goals.

Start by clearly defining your financial goals. The more specific you are, the more achievable your goal becomes, so avoid vague statements. For example, instead of saying you want to “pay off your credit card balance,” specify the exact amount. A more effective goal would be, “I want to pay $5,000 on my credit card within twelve months.”

Next, make your goal measurable. The simplest way to do this is by including a specific dollar amount. If your goal is to save $5,000 over the course of a year, consider setting a midpoint goal, such as $2,500 in six months. This checkpoint allows you to track your progress and motivates you by showing you’re on the right path.

Make sure your goals are achievable by setting realistic expectations. Overly ambitious goals can backfire because if they feel too out of reach, you might lose motivation and give up. For example, instead of aiming to pay off $5,000 in credit card debt within twelve months, break it down into manageable steps such as $417 per month, or $96.16 per week. Smaller, realistic milestones make the goal feel attainable and help you stay motivated along the way.

Next is Relevance in the SMART framework. When setting your goal, pick one that aligns with your values. Take the time to understand why you want to achieve it, and then it will stay at the top of your mind and will inspire you to accomplish it.

The final step in setting SMART goals is making them time-bound. If your budget doesn’t allow you to meet a certain dollar amount by the end of the year, consider extending the timeline to two or three years.  Aim for a deadline that motivates you without causing unnecessary stress - giving yourself too much time can reduce your sense of urgency and slow your progress.

From start to finish, make sure to track your progress throughout the timeframe that you have set, whether in a spreadsheet, an app, or even with pen and paper.  Tracking your progress helps you stay motivated and allows you to adjust as needed. Plus, this may inspire future goals once you accomplish your first ones.

If your goal is to increase your savings or to build an emergency fund, consider setting up a recurring transfer from your chequing account to a savings account on payday. This makes saving effortless, since you know when you are being paid, you can track the growth of your savings account or emergency fund. On the flip side, if your goal is to pay down debt, you can set up automatic payments to stay on track. Let your bank account do the work for you!

If you are not sure which goal to set, here are a few examples to inspire you:

·      Pay down $2000 of credit card debt within twelve months

·      Set $3000 aside for an emergency fund in two years by putting $125 a month into a separate savings account.

·      Save for a $10,000 down payment for a house in twelve months.

·      Invest $100 a month into an RRSP for the next three years.

·      Set $100 a month for twelve months to pay for a trip

Remember, don’t be too hard on yourself – just do your best and celebrate your progress. If you have a setback, don’t get discouraged. Pick yourself up and get back on track. And if you miss a step, simply circle back and add it in.

If at any step of the way, you need help, contact us

Sunrise is here for you.

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