Financial Goal Setting: 5 Simple Steps to Set Yourself Up for Success in 2024

With the new year arriving soon, goal setting season is officially upon us. It is hard to look anywhere and not see some version of someone promoting “new year, new you”. It can be easy to think that every part of our life needs to be adjusted, however it is important to look at goal setting as a structured process instead of a knee jerk reaction to a news headline or sales pitch. 

In this post, we’ll discuss how to establish a disciplined decision-making framework to inform exactly how to go about setting and actually achieving your financial goals for the upcoming year. 

Step 1 – Identify: Be clear about your Financial Plans

Before taking any steps to change any unwanted behaviors or habits, it is important to understand what we actually want to achieve. While it can be easy to jump to an immediate action we want to take, it is most important to see the end state and work backwards from there. “Where there is no vision, the people perish: but he that keepeth the law, happy is he.” -Proverbs 29:18(KJV)

For example, if we want to increase our emergency fund by $20,000 by the end of the year, we would first identify $20,000 as the goal, and then decide how often(monthly, bi weekly, etc) we want to take a step towards achieving it. If we want to make a weekly deposit, dividing $20,000 by 52(weeks in a year), we arrive at $385/week. 

Step 2 – Prioritize: Write down the Pros and Cons of each Goal

Adulting can be so “fun” at times. Prioritizing any large decision can feel like trudging through quicksand. However, without prioritizing our main focus, we can get distracted easily and fall into the trap of ineffectiveness. The prioritization process can eliminate much, if not all, of this ambiguity and guesswork. 

Putting this into practice can be a simple, although not necessarily easy, exercise. My favorite way of prioritizing goals is to write down(yes, not just in your head), the pros and cons of each goal in two columns. Again, this can feel like unnecessary busy work. I get it. However, there is a connection that is made in your head that allows you to not only think, but also see the effects of your potential goals. This is a powerful step and shouldn’t be minimized. 

Step 3 – Decide: Set 2-3 Financial Goals

At this point, we have officially determined our best and most achievable goals. Inevitably, a decision must now be made to cement this plan of action into place. Now, this decision doesn’t have to be your final decision. In fact, more decisions will probably need to be made later on. However, the point is that you are making the commitment to take action on something for the purpose of working towards your goal. 

I usually recommend 2 or 3 goals as your main focus until you start to build more momentum. As you begin to see your goal becoming more and more achievable, you may start to add another goal. For example, if you have saved $15,000 towards your $20,000 goal, you may then begin thinking about starting your next goal. However, the point is to build on the momentum you’ve been making, not simply add a goal just for goal’s sake. If you are confident your momentum will carry you through to completion, it’s okay to begin working on the next one on the list. 

Step 4 – Implement: Put Your Financial Plans into Action

Step 4 is the point where we can finally do something, whoo! Whether it’s scheduling the first of your 52 weekly savings account transfers, or picking up the phone to get the life insurance quote you’ve been needing to get in place, it’s time to put action to your plans. Whatever it is, it is important to stick to your plan and prioritize the first goal above the rest. Once you’ve officially implemented your first goal, move on the second goal, then the third. However, don’t move on to the next goal until you’ve done as much as you can on the one before it. This makes sure you are not spreading your focus into too many areas, as we mentioned in our first step. 

Step 5 – Evaluate: Establish Milestones and Hold Yourself Accountable

Any successful completed project always has one requirement in common – maintenance. Just as your house paint fades and caulking cracks, so your goals need to be assessed to ensure you are staying on track to meet them by your decided-on deadlines. The easiest way to do this is to establish milestones for each goal and hold yourself accountable to them. For instance, for our $20,000 savings goal, if we are at July 1^st(halfway through the year), but we only have $9,000 saved, we will need to bump up our weekly savings amount to catch up. 

Another consideration is the frequency that you evaluate. When you are first beginning, it may be best to evaluate your goals monthly until you establish the level of discipline necessary to evaluate less often. For example, set the first day of the month to see how you progressed on the previous months. If you are consistently meeting your milestones, scale back to every other month. 

Lastly, take the time to celebrate! There is nothing more motivating than looking back months or years before and seeing how many goals you have accomplished. If you are completing the goals you set out to achieve, make sure you mark these milestones in one way or another. It can be as simple as going out to dinner with your spouse/family, taking a small vacation, or buying that special something you’ve been waiting for. After all, what is the point of setting goals if we don’t enjoy the end result?

Ultimately, setting financial goals is a worthwhile endeavor that has proven future benefits. Take the time to do yourself a favor and set up the framework now you need to set and achieve them. Your future self will thank you.

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This content is developed from sources believed to be providing accurate information. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Evergreen Financial Group, LLC is a registered investment advisor offering advisory services in Montana and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. This communication is for informational purposes only and is not intended as tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This communication should not be relied upon as the sole factor in an investment making decision. All opinions and estimates constitute Evergreen Financial Group’s judgement as of the date of this communication and are subject to change without notice. Evergreen Financial Group does not warrant that the information will be free from error. The information should not be relied upon for purposes of transacting securities or other investments. Your use of the information is at your sole risk.