Happy 2024! Setting the Right Financial Resolutions to Kick Off the New Year

Well, we’ve made it another year. I can’t believe we’re already three years into this decade. I have to be honest, I was really excited for the “new Roaring 20s”. A pandemic, economic meltdown, runaway inflation, and several major global conflicts later, and well, it’s been a shit show. We didn’t get off to a great start. But I have a good feeling about 2024. Deep down I have the feeling that this year is where we turn it all around.

Like I do every year, I sit down over the long New Year’s weekend to review the past year and plan out the coming year. I see how well I did against last year’s goals. Then, I plan out the goals for the new year. Setting the right goals is key to making sure I am always moving forward and making progress toward the life I envision for myself and my family.

When creating New Year’s resolutions and goals, it’s important not to take this lightly. You want to make sure that your goals are aggressive enough that you push yourself, but also not so ambitious that you set yourself up for failure. For this reason, I recommend using the SMART methodology for goals. If your goals don’t follow this framework, they will be extremely difficult to track and accomplish.

• Specific — You need to be very specific about what you are trying to accomplish. For example, don’t set a goal to simply increase your net worth. Be specific. A better goal would be to increase your net worth by $20,000. Specific goals are easy to confirm whether you accomplished them or not.

• Measurable — You have to be able to measure your progress. The good news is that more financial goals are easily measurable. Tracking is the key here. As long as you carefully track your progress, you’ll be able to measure how well you are doing.

• Achievable — Sure, I’d love to be a billionaire, but that isn’t realistic. You need to make sure that your financial goals are achievable or failure is imminent.

• Relevant — Your goals need to be relevant to your long-term financial strategy. For example, if your goal is to retire early, saving up for a down payment on a more expensive house might mean you have to keep working longer. Make sure your short-term goals don’t contradict your overall vision.

• Time-Bound — Every goal should be tied to a specific timeframe. Otherwise, you are basically giving yourself permission to never accomplish your goal.

Now that you know how to set strong goals, let’s look at some of the types of financial goals you can set in the new year to keep momentum toward building a stronger financial foundation on your journey to financial freedom. I always try to set at least one from each category.

1. Financial Goals

These goals are the most obvious. You should always have a specific financial goal in mind that you want to accomplish during the next year. This goal will be different for everyone depending on where you are in your financial journey. If you are just getting started, you may want to begin with finally creating a budget. If you have been working on financial goals for years, you might set a more advanced goal such as continuing to increase your net worth. Here are some ideas to get you started:

1. Create a budget

2. Build an Emergency Fund (start with a small target, but ultimately work up to cover 3-6 months of expenses)

3. Create a debt pay-off plan

4. Renegotiate some of your expenses (like car insurance)

5. Downsize your home to save on living expenses

2. Educational Goals

Financial literacy is one of the most critical elements to building a strong financial future. It doesn’t matter how much money you earn or how much you try to save, without having a solid financial foundation of financial education, you will always struggle. In addition to financial education, there are other financial pursuits that can help you improve your career and financial success. Educational goals include, but aren’t limited to:

1. Create a wish list of financial books that you want to want to read during the coming year

2. Enroll in a college course or training that will give you more earning potential in the new year

3. Take time to learn about an unfamiliar asset class (like real estate, crypto, etc.)

3. Career Goals

Earning a higher salary can make a huge difference on your ability to save and invest more for the future. The good news is that most people have room for growth in their career or business endeavors. Career goals include:

1. Asking for a promotion at work or getting a new job

2. Starting a side hustle for additional money

3. Building or buying an existing business

4. Future Planning

Having enough money in the moment to pay your bills is great but you want to think about the long-term. Your ultimate goal should be to build a strong financial future, hopefully one where you don’t have to worry about money. This doesn’t happen overnight. There are numerous ways that you can secure your financial future and help protect the wealth that you have built.

1. Set up your first retirement account or 401k

2. Create a college savings account for your children

3. Write a will

4. Review your insurance coverage (health, life, home owners, automotive, etc.) to make sure you have enough coverage in the event of an emergency.

Setting Up Your Goals for the New Year

Setting financial goals for the new year is one thing. Actually accomplishing them is another. First, I recommend writing down your goals somewhere, preferably in a visible place that you can see every day. This will give you something to reference and look back throughout the year. Personally, I like to write mine on my whiteboard next to my desk.

Sharing your goals with others is a good way to help hold you accountable. Studies have shown that people who share their goals with other have a 70% chance of accomplishing them. Feel free to post them (as long as it isn’t sensitive financial information) on your social media for your friends to see. It’s also helpful to get an accountability partner to check in and push you to keep going. This is where having a spouse or significant other is a huge plus.

Finally, if you have multiple goals, don’t try to complete them all at once. This can be very overwhelming. Instead, I like to create 12 key goals for the year. I only focus on one each month. This gives you the opportunity to build a good habit over 30 days before you add the next objective. For example, in January, you might build a budget. Then, in February, you focus on reducing your monthly costs, then, March could be focused on stocking up your emergency fund.

No matter how you plan to approach your financial goals in the New Year. I hope its a great one! Best of luck and remember that I’m here to help you if you get stuck or need a coach in your corner to help you achieve the life you’ve always wanted.