Setting financial goals
Each new year, many Canadians set their new year’s resolutions. Many of these resolutions are often financial based. Studies reveal that financial resolutions are the third most popular new year resolutions, albeit, only 19% of Canadians are loyal to their financial resolutions. The main reason for this low percentage turnout is simple: setting goals and sticking to them are two different things altogether.
Nevertheless, setting new year’s resolutions you will probably stick to is a form of art especially when it comes to matters money. This article highlights some of the factors to consider when setting practical new year’s financial resolutions.
SMART goals
Such goals are not just vague ideas running through your head but should be those which are Specific, Measurable, Achievable, Realistic and Time-bound. They should indicate clear benchmarks alongside key performance indicators. An example of a smart goal: ‘Clear $10,000 in student loan debt before the year ends’. This goal is unique in the following ways:
This makes it simple to track the amount of debt paid off within a specific year.
You may need to put in a little bit of sacrifice to reach this landmark. I.e. to pay off $10,000 you’ll have to pay averagely $883 monthly. If you paid say, $300 monthly the previous year in debt, you’ll have to add on $533 to achieve your $10, 000 target by end of the year. You can get a raw idea on how to improve your debt repayment in your current year by using the total debt paid in the past year as a baseline. E.g. if you cleared debt totaling to $8,000 the previous year, $10,000 would be a realistic target to meet in your current year.
Be Clear
When setting up challenging financial goals e.g. debt settlement plans, be sure to consider your intentions for this resolutions. Whether it is for financial security, to create more room for your budget, to save for the future or to do away with stress etc. This will help you remain motivated until the end of the year.
Simplify it
If you find your new year financial resolutions overwhelming, consider breaking them into smaller and easy to manage objectives. For instance, to pay off a large chunk of debt, estimate how much you may need to pay off quarterly or monthly. This will not only keep you on track but also reward you with chains of small wins to keep your desire to achieve your goal alive.c
Reward yourself
In conclusion, setting and accomplishing new year resolutions is a great achievement. And if you manage to stick to your rules and accomplish your goals, reward yourself with something nice. It could be dinner at a fine restaurant or an electronic gadget you like. This will give you more strength and excitement to achieve greater goals.