3 Easy Steps to Reach Your Money Goals This Year (and Beyond!)

This article originally appeared on Money Saved Is Money Earned and has been republished with permission. 

It’s a new year and the beginning of a new decade, and what better way to move the roaring 20’s on past that horrible year that was 2020 than to make a plan to finally achieve your money goals. I know New Year’s Resolutions aren’t everyone’s thing, but there’s no time like the present to really dig in and make the changes you want to see in your life. Seriously, you can do it, no matter how big it may seem. All you need is a plan and the persistence to see that plan through, even if it takes you beyond 2021 to achieve.

Even if you’re not quite ready to tackle your money goals right now, the process we’re about to describe can be used at any time. So, continue reading for help with setting your money goals and achieving them. Here’s how to reach your money goals this year and beyond.

Identify Your Goal

The first step of achieving any goal is to identify exactly what it is you’re trying to do. Thus, the first step to reach your money goal this year is figuring out what that money goal (or goals) is. For some, money goals will come readily to mind, but for others it may not be so simple. You may have many things you’d like to work on or one big thing. Do you want to pay off debt? Save more of your money? Start investing? Maybe you’d like to make more money, or learn new skills that will help you make more money?

You should narrow down a goal that is both manageable and specific. It needs to be manageable so that you’ll be able to achieve it and specific so that you can track your progress and easily tell when you’ve met it. It may be helpful to start with a broad goal and then narrow it down into one or two specific goals.

For instance, if your goal is to pay off debt, you could use that broad goal to identify the specific goals of paying off your credit card debt and also your auto loan. Or, say you want to save more money. You could then be more specific by saying you want to save $10,000 toward a down payment on a house or toward your child’s college fund. Making your goals specific will give you a definite ending point, which then allows you to make a plan to achieve it.

Whatever your goal, make sure it’s specific so that you know where you’re going, but also manageable so that you’ll be able to achieve it within the desired time frame.

Know Where You Stand

The next step to reach your money goals this year is to know where you currently stand. For instance, do you know your 8 critical personal finance numbers? The goal you just set is the destination, but you must know where you’re starting from to make an effective plan for reaching your destination.

Going back to the example above of paying off credit card debt, we can now take it a step further by calculating exactly how much debt we have left to pay off. Now let’s say you look at your credit card balances and see that you have $2,000 left to pay. Looking at the goal of saving $10,000 for a down payment on a house, where do you currently stand? Do you already have something saved? If so, how much more do you need to save to reach your goal? Are you trying to save $10,000 additional dollars? Don’t be discouraged. For some, $10,000 may be too big of a goal. The idea is to make a plan that YOU can achieve. Whatever you can achieve over the next year, you’ll be better than you are now.

It’s important to specifically identify the end goal (destination) as well as where you currently stand (starting point). Once you have those two points, all that’s left is to make a plan to get from the start to the destination.

Make a Plan

The third step to reach your money goals this year is to make a plan for getting from point A to point B. While your plan will be specific to you and your situation, there are some key things to consider when making your plan that we will discuss here.

Determine Stepping Stones

First and foremost, you will need to determine the specific steps needed to reach your goal. This can be done by breaking the larger goal down into smaller goals. Take baby steps before so you’re goal doesn’t seem overwhelming. If your goal is to pay off debt, how much will you need to set aside each month in order to reach that goal? If you want to save a specific amount, how much will you need to save monthly? How much each paycheck?

Make a Plan That Will Work for You

As you’re determining the smaller steps needed to reach the larger goal, make sure that you’re making a plan that will work for you. You would need to save about $834 a month to save $10,000 in a year. That’s a lot of money a month and may not be realistic for your situation. If you’ve run the numbers and are still set on reaching that goal, what do you need to do to make it happen? Maybe you’ll need to start a side hustle or work extra at your main job? Maybe you need to reduce your expenses? Make your goals lofty but reachable.

Write Goals Down

You’ve put all this work into identifying a goal and determining the steps you need to take to reach it, but it’s also very important that you write those goals and steps down and put them in a place where you’ll see them frequently. Doing so will provide you with a frequent visual cue that will keep your goal at the forefront of your mind. Furthermore, writing something down gives you a much higher chance of remembering that thing because writing provides an extra step in our brain’s encoding process.

Set a Timeline

We’ve already vaguely hinted at a timeline, but it’s worth mentioning in more detail here. The larger goal, as well as the smaller steps needed to reach it, should always have a timeline attached to them so that you know just how fast you need to go to reach your destination. Setting timelines will help you stay on track, as well as let you know when you’re off track or ahead of schedule.

If you don’t have a timeline for your goals, you’ll have no way to know if you need to make adjustments along the way. Thus, the goal is the destination, your current status is the starting point, and the timeline lets you know how fast you need to go to reach your destination.

Track Your Progress

Lastly, it will be important for you to determine a way to track your progress so that you can monitor your timeline and know whether adjustments need to be made. Aside from knowing how you’re doing and whether adjustments need to be made, tracking your progress will help you stay motivated to reach your goal.

Using one of the tips above, tracking your progress will be especially helpful if you have a visual way to see progress. For example, you could draw a money jar and add a new layer showing your savings each month. For tracking debt payoff, you could write down a series of payments and cross them off as you make them. And make sure to track your progress in a way that’s meaningful to you.

Don’t Let Hiccups Trip You Up

You’re ready to go. You have your specific goal, the steps needed to achieve it, a timeline, and visuals to track your progress. Things are going well but a few months in you don’t quite reach your goal for that month. Don’t get discouraged! Everyone stumbles once in a while. Life happens, things change. Even the best laid plans hit roadblocks.

Things WILL happen, so probably the most important piece of advice we can give you for reaching your money goals this year is to never give up. Adjust the plan or timeline as needed, forgive yourself for mistakes, but never give up the larger goal. If you keep at it long enough you will reach it. Whatever may happen, persist the best you can. Some other quick tips for reaching your money goals this year are:

• Celebrate the small wins
• Share your goals so others can help
• Seek out help as needed
• Adjust goals as necessary

Moral of the Story

Create a vision for your life. It’s a new year and a new decade, and the perfect time to begin tackling your money goals. What do you want to accomplish this year? Where will you be a decade from now? What do you need to do to reach your money goals this year and beyond? 

Begin by establishing specific goals so you know your destination. Next, determine where you currently are, as that’s your starting point. Then, make a plan to get you to your destination. Make sure your plan is broken into stepping stones and that it works for you. Remember to write your goals down, set timelines for achieving them, and track your progress. Mistakes are a matter of when, not if, so forgive yourself when you make them.

Help yourself persist by celebrating the small wins, enlisting the help of your friends and family, seeking other help as needed, and adjusting your plan as necessary. The past is gone, and the future hasn’t happened yet. Now is the time to shape how you want that future to look. Where were you last year? Where do you see yourself next year? Next decade? Now go out and do it. Talk about Money Learned.