Financial Watch | April 2022

5 Easy Steps to Get Your Financial Resolutions Back on Track

Did you know that 80% of News Year’s resolutions fail by mid-February?¹ Interestingly, most people do not fall short of their goals due to a lack of motivation or because their goals are too ambitious. Instead, it’s because they don’t have a plan for how to get back on track if they veer off course.

Whether you’re seeking to rein in spending, pay down debt, increase retirement savings or pursue other important financial objectives this year, consider the five steps below to help ensure you have a plan that’s actionable and attainable. That can go a long way toward staying the course as you pursue the financial and lifestyle goals that are most important to you and your family.

1. Be specific

Like most things in life, the more specific your goals, the better your chances of achieving them. For example, a goal to “save more” may be too subjective to hold you accountable and keep you motivated. On the other hand, committing to set aside 5% of your income in an emergency fund may be a more attainable objective, due to its clarity.

2. Understand why

For a goal to be meaningful and worth pursuing, it must be relevant to you. That begins with understanding the “why” behind each of your goals. Why do you want to increase savings? Are you saving for the down payment on a home, to boost emergency savings, increase retirement savings, or other reasons? When goals are relevant to your lifestyle wants, they take on greater meaning and urgency. As you think about your goals, envision achieving your desired outcomes. For example, what will it feel like when you purchase your first home or move your family to a larger home? Focusing on the positive outcomes that a particular behavior, such as saving, can have on your life and your financial circumstances can make it easier to stay on track toward your goals.

3. Keep it real

The more realistic your goals, the more the confident you will feel about accomplishing them. Often, that requires breaking large goals into smaller, more manageable steps so you’re not setting yourself up for failure. For example, if you’ve put off saving for retirement and are eligible to participate in your employer’s retirement plan, take the opportunity to join now, even if you can only contribute a small amount each pay period. As soon as you’re able, increase your contributions to ensure you’re benefiting from any employer matching contributions. Consider increasing your plan contributions annually, until you’re making the maximum allowable contribution. If you’re age 50 or over, you can also make annual catch-up contributions, which are beneficial as you approach retirement. Being able to check off small goals along the path to accomplishing a larger goal can be satisfying and motivating.

4. Set deadlines

Once you’ve established goals that are specific, relevant and realistic, you need to establish a time frame for achieving each of your goals. Again, keeping it real is important here. Doing something “as soon as possible” is too vague and won’t hold you accountable. You also don’t want to set deadlines that are too ambitious that could set you up for failure. Maintaining a budget, which tracks your monthly income and spending, is a great tool for determining reasonable deadlines and time frames associated with each of your goals, from saving more, to paying down debt and making a plan for how you will carry out your legacy.

5. Measure progress

Your budget can also help you track progress toward your goals, which is critical for staying on course. Tracking progress begins with ensuring each goal is measurable. A goal to “save more for retirement” is hard to quantify and is not time sensitive, making it difficult to measure in any meaningful way. Whereas “increasing plan contributions by 2% annually to capture your plan’s full match within three years” is specific, actionable, timely and measurable.

Finally, take the time to celebrate the small milestones reached along the way. They pave the way to the big wins in life and will inspire you to continually set and pursue new goals with confidence.

To learn more about putting a plan in place for your future, call the office to schedule time to talk.

^{1 https://www.washingtonpost.com/health/2022/02/19/how-to-keep-new-year-resolutions/}

^{This information was written by KRW Creative Concepts, a non-affiliate of the Broker/Dealer.}

^{Please note that neither Cetera nor any of its agents or representatives give legal or tax advice. For complete details, consult with your tax advisor or attorney.}