New year’s resolutions are upon us and this could be the perfect opportunity to get your financial house in order. It doesn’t matter where you are on the money ladder, setting clear financial goals can be a huge boost to your financial security. You can set goals for your investments, savings, spending and retirement fund.
Everyone’s financial goals will look a little different, the trick is to set achievable goals that put you on the path to your own personal success.
Here are some tips to help you set your financial goals for 2023.
Use the SMART philosophy
Successful goal setting is about getting stuck into the detail, which includes taking stock of where you are and where you want to be. It’s good to dream big, but it isn’t always the best path for goal setting. Goals that are too far out of your reach can seem overwhelming, which could lead to a lack of motivation.
By using the SMART philosophy you can make your goals more manageable. The SMART philosophy refers to setting goals that are:
- Specific – instead of being vague, be specific and set an amount you want to save
- Measurable – track your progress through graphs, apps, and weekly check-ins
- Achievable – work towards a realistic goal that is within your reach
- Relevant – choose goals that are relevant to what you want to achieve
- Timebound – set a deadline for your goals as this will hold you accountable
The start of a new year is a great time to organise your finances and get your documents in order.
Before you start mapping out your financial goals for 2023, it’s handy to take stock of your current financial position. Knowing how much you have in savings, how much debt you need to clear, and which areas of your financial life you want to improve, can help you find a clear path.
Start with micro-habits
It’s easy to feel overwhelmed when mapping out financial goals, but if you start by implementing a few micro-habits, it can make your goals seem a lot easier.
Some successful micro-habit ideas could include:
- Automating your savings
- Setting up direct debits so you aren’t late on your bill
- Paying an extra £5 off your debts each week
- Setting a ‘waiting time’ before making a purchase
- Listening to one money podcast or reading one article a day that offers insightful financial advice
Go short and long
Don’t just look to the short term when it comes to goal setting; start mapping out plans for the longer term too. Perhaps in the next few months, you want to set up a savings account to prepare for a big purchase, but how can you also use this time to contribute to your longer-term financial future?
When it comes to financial planning, it’s worth taking stock of short, medium, and long term goals. For example:
Short-term – put a set amount aside each month for the next 6 months to save for a holiday
Medium-term – pay an extra amount to clear your credit card debt in 2-5 years
Long-term – set up a strong investment portfolio or open a retirement savings account
Start a budget
Setting up a budget is a great way to visually see where your money is going. By tracking your spending you can put your money habits into perspective and get insight into where you need to make changes.
Knowing how much money is slipping through the cracks can help you to redirect it into places that will help you achieve your financial goals. For example, instead of lunch out every day, you can channel those funds into small investments or use them to reduce your credit card payments.
Chip away at debt
Slowly chipping away at debt can be a great option for your annual financial goal setting.
You might want to focus on reducing the debt on:
- Your credit card
- Mortgage payment
- A personal loan
- Any other debt that you’re paying off
Setting up a plan to clear debt can seem daunting, but this guide is a great place to start.
Saving more of your hard-earned money is a great goal to have, no matter where you are on your financial journey. No one knows what the future holds, so whether you’re new to saving or you have several savings accounts, extra savings are always welcome.
If you don’t already have one, you might want to consider opening an emergency fund savings account. Do your due diligence when it comes to research and make your money work for you by choosing savings accounts with the most competitive interest rates. A high interest savings account can do more with your money and make it easier to save for your future.
If you’re in a more comfortable financial position, 2023 may be the year you kickstart or broaden your financial portfolio. Investments can be a great way of earning passive income and can help you to build a more sustainable financial future. If you’re new to the world of investing, it’s worth researching how to get started and look at the kind of investments that could work best for you.
Financial goals are important. They help you to curate the life you want and achieve your dreams. Financial goals don’t have to be big or complex – they can be as simple as saving a little each month, increasing your credit card payments, or saving for a holiday or house.
Being more mindful about your money can make a big difference to your financial health and your overall well being. Take the SMART approach, take stock of where you are, implement new habits and start saving in 2023.