As the new year begins and the holiday excitement fades, this is an excellent time to focus on setting financial goals. If you’ve spent heavily on gifts and travel recently, you may feel motivated to get your finances in order.
You’re not alone in this pursuit. A January 2024 survey from the Pew Research Center found that among the 30% of Americans who made New Year’s resolutions, 61% had financial goals.
It’s natural to feel a strong desire to fix every money issue immediately, but life’s daily demands can make this challenging. That ambitious list of financial goals may eventually get pushed aside as other responsibilities take priority. In fact, most New Year’s resolutions go unfulfilled.
How can you improve your chances of success? Start by accepting that perfection isn’t realistic. Instead, focus on building a system that helps you prioritize, plan ahead, and stay accountable.
Start with Actions That Have Big Impact
Many people focus on cutting small expenses, which can help, but there are other steps that may yield significant benefits. Taylor Schulte, a certified financial planner and founder of Define Financial in San Diego, recommends tackling often-overlooked tasks.
Freezing your credit is a simple, cost-free way to protect yourself from identity theft. If you need to apply for a loan or credit card, you can temporarily lift the freeze. Schulte also suggests looking into umbrella insurance, which provides extra coverage beyond your auto or homeowner’s insurance. This protection can save you from large out-of-pocket expenses if you’re sued.
Another essential task is basic estate planning, such as creating a will. While it’s easy to put off, taking care of this can save your loved ones a lot of stress if something unexpected happens to you. “I know it’s a pain point and often gets delayed,” Schulte says.
Set Goals That Reflect Your Priorities
It’s easy to set goals based on what others think you should do. For example, you might feel pressure to save for a house even if you’re content renting, or to prioritize retirement savings at the expense of your current needs. However, your financial goals should align with what truly matters to you. Otherwise, you’re likely to lose motivation.
“If you don’t know what goals to choose, go back to your values and let them guide you,” says Eric Roberge, a certified financial planner and founder of Beyond Your Hammock, a financial advisory firm in Boston.
You can also combine goal-setting with a plan to manage upcoming expenses. Think about costs you expect in the next six to 12 months, such as bills, vacations, or home and car repairs. Setting aside money each month for these expenses, along with longer-term goals, can prevent unexpected surprises.
Stay Accountable to Your Goals
Without reminders, it’s easy to forget your goals. Write them down and keep them visible, whether on a handwritten list on the fridge or as digital reminders.
For time-sensitive goals, set deadlines. Break them down into tasks you plan to complete within the next week, month, or quarter. Update your list as you make progress.
You can also involve others. If you’re managing finances with a partner, hold regular household money meetings. Share your goals with a trusted friend or family member who can check in on your progress. “We don’t mind letting ourselves down,” Schulte says. “But we hate to let other people down.”
Focus on Progress, Not Perfection
It’s easy to get stuck trying to make the perfect choice, whether picking a savings account or deciding on investments. But action often matters more than perfection.
Roberge points out that while optimizing every financial decision is ideal, it’s not always practical. “Everything in moderation is one of the things that I live by,” he says. “Going to extremes at the expense of other priorities doesn’t work long-term.”
By setting realistic goals, staying organized, and accepting that “done” is often better than “perfect,” you’ll be better positioned to achieve your financial aspirations in 2025.
