One Thing You Should Keep in Mind When Setting Financial Goals for the New Year

pencil-918449_1920I hope your New Year is off to a great start. If you’re still in the process of setting financial goals for 2017, you’re not alone.
Setting goals can be difficult because the odds are often stacked up against you.

According to research from the University of Scranton, financial goals are in the top three categories for goal setting and around 93% of Americans don’t reach the resolutions they set each year.

While that sounds disheartening, I’m still all for goal setting and you should be too. Setting goals helps provide a framework for your life and allows you to focus on your values and what your future plans are.

If you want to improve something about your life or take a big risk, you’ll need to set goals even if it’s not during the beginning of the year.

When it comes to setting financial goals, you must remember one thing: Rome wasn’t built in a day.

I always keep that saying in mind when working on my financial goals because I know the journey can be long and provide many twists and turns. You may not solve all your financial issues in 12 months because success isn’t always built in one day or even one year.

Learn That Big Wins Take Time to Generate

One of the worst things you can do when setting your financial goals is to compare yourself to other people. The goal setting process is all about you and your vision for your life, not someone else’s actions or achievement.

If you know someone who’s experienced a ‘big win’ you’ll probably be surprised to know that they’ve been working on their huge goal for much longer than a year.

I started trying to improve my finances in 2014 and would often compare myself with people who started earlier than me and that wasn’t fair or realistic.

It’s important to realize that your goals may take longer to reach depending on what they are and remember to celebrate the small wins as well.

Don’t View Setbacks as Failure

Setbacks are going to occur this year whether you like it or not. The best thing you can do is bounce back. You may not meet all your goals this year and things may not go as planned but it’s important to avoid viewing this as a failure.

I usually report the goals I set on my blog and when I post updates, I’d refer to the status of some goals as ‘pass’ or ‘fail’. Last month, I stopped doing that because I realized the negative connotation attached to the word ‘fail’.

Sure, I didn’t have a perfect year, but I wanted to give myself credit for what I did accomplish and acknowledge the setbacks of factors that affected my end results.

For example, one of my goals last year was to earn more with my blog and my business. I worked full time up until the end of August and I came really close to meeting my goal of earning $5,000 per month in online income.

Some months, I was just a few hundred dollars away but the payments I received never lined up to meet or exceed $5,000 for the month. Now, I could have viewed my results as a complete failure, but that would mean I’d have to ignore the significant amount of progress I made.

I did manage to increase my income by around 40% last year. I also managed to save more, pay off more debt than the previous year, and feel confident enough to quit my job to do something I loved.

Plus, even after quitting my job, I earned enough income to comfortably support myself and continue putting extra money toward my student loans. That sounds like a lot of progress to me.

The reasons why I might not have met my goal include the fact that I didn’t implement a clear strategy, slowed down several times throughout the year to maintain my sanity, shifted my focus to my wedding since I got married midway throughout the year.

Of course, I was more than happy to slow down with work for my wedding and I’d do it all over again in a heartbeat. The only true ‘setback’ I recognized when it came to not meeting my goal last year was not committing to a specific strategy to increase my income and this is something I can always change next year.

Set Attainable Goals

A big reason why people don’t meet their annual financial goals is because they often set goals that are over their head. Rome wasn’t built in a day, and some goals are just not attainable if you only give yourself a few months.

My husband and I recently started working toward paying off all our debt together. We started with around $45,000 and managed to pay off around $14,000 last year.

It would have been pretty unattainable to try to pay off the entire $45,000 last year just like it would be unattainable to set a goal to pay off the remaining $30,000 this year.

I like being realistic and considering the entire picture. My husband and both have growing incomes, but we’d like to be able to meet other expenses we have as well so debt repayment can’t dominate an overwhelming portion of our income.

Instead, we set a goal to pay off a portion of our remaining debt total and we’re hoping to pay off around $15,000 in principal. Breaking up your financial goals into chunks can make them more attainable.

Sure, it will take more time to achieve them, but at least you’re be making progress instead of getting burnt out, overwhelming, and unable to meet your annual goals.

Have you set any financial goals for 2017? Do you believe that slow and steady usually wins the race?

Posted in: Money

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