4 ways to improve your chances of achieving your New Year’s money goals

Sarah Rathner

With the new year upon us and the holiday fanfare behind us, this is a great time to set money goals, especially if you’ve recently spent a lot on gifts and travel and want to get your finances in shape.

Right now, you may be highly motivated to solve every one of your money issues over the next few months, but everyday life is guaranteed to get in the way. Your financial to-do list, once full of promises, may end up getting pushed to the back of a drawer while you attend to more pressing matters.

So how can you improve your chances of success? It all comes down to accepting that you won’t have the time or energy to complete every task to perfection. Creating a system where you can prioritize, plan ahead and hold yourself accountable can help.

Consider unexpected actions with high impact

Many start by setting a goal to cut frivolous expenses, which can certainly help, but there are other ways to make a big difference. Taylor Schulte, a certified financial planner and founder of Define Financial, an advisory firm in San Diego, recommends starting with a few overlooked financial tasks.

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A credit freeze is a quick and easy way to protect yourself from identity theft. It’s free, and you can temporarily lift the freeze when you apply for a loan or credit card. Schulte also suggests looking into umbrella insurance, which offers additional coverage beyond what your auto, home and other insurance policies provide. This coverage can save you huge out-of-pocket costs in the event you are sued.

Basic estate planning, including creating a will, is another thing to put high on your list. Postponing this task can create a big headache for your loved ones if something unexpected happens to you. “I know it’s a pain point and it’s thrown around a lot,” Schulte says.

Paying attention to your spending is always important, but don’t neglect taking steps to protect your money, yourself and your loved ones.

Focus on what’s really important to you

So many money goals are born out of social pressure. You “should” want to save to own a home, even if you’re happily renting. You “should” sacrifice short-term needs and want to stash away as much as possible for retirement, even though you feel deprived. But money goals should be tied to the things that are most important to you. If they are not, you will quickly lose interest.

“If you don’t know what goals to choose, go back to your values ​​and let them guide the goals you set,” says Eric Roberge, a certified financial planner and founder of Beyond Your Hammock, a financial advisory firm in Boston.

You can combine goal setting with a little planning, so expenses are less likely to creep up on you throughout the year. Think about expected expenses that will occur in the next six to 12 months, such as recurring bills, vacations, anticipated home or car repairs, and other expenses. This approach allows you to set aside money each month for planned expenses as well as long-term goals.

Hold yourself accountable

It can be all too easy to forget your goals, so to stick to something, write it down. It can be as simple as a handwritten list you keep on the fridge or reminders from an online calendar to nudge you every so often.

Set deadlines for time-sensitive goals. One tactic is to create multiple lists based on what you need to complete in the next week, month, or three months. As time goes by and you mark items, you can update the list.

Include the help of others. Weekly or monthly household money meetings are useful if you are doing financial tasks as a group. Or share your goals with a trusted friend or family member who can serve as an accountability partner. Messing around with loved ones can help you stay on track. “We don’t mind letting ourselves down,” says Schulte. “But we hate to let other people down.”

Recognize when ‘done’ is better than ‘perfect’

It’s easy to get stuck in decision-making mode when you’re trying to choose a high-yield savings account, credit card, or possible investments, but in the end, you have to make a good enough choice. Taking action now can have a more positive effect on your life than waiting until you have carefully considered each option.

Roberge says that while he would prefer to optimize every financial decision, he doesn’t because if he did, he wouldn’t get things done. “Everything in moderation is one of the things I live by,” he says. “Going to extremes in anything, to the detriment of other things that are important, doesn’t work in the long term.”

This article was written by NerdWallet and originally published by The Associated Press.

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