Welcome to the new year!
It’s the perfect time to set some fresh financial goals and come up with a plan to achieve them. Whether you’re looking to save a few extra dollars, pay off debt, save for your kids’ education, or invest in your future, setting financial goals can help you take control of your dosh and achieve your long-term financial dreams. But it’s important to set goals that are realistic and achievable, rather than setting yourself up for a fall.
In this article, we’ll give you a step-by-step guide for creating a financial plan and setting realistic money goals for the new year. With these tips, you can work towards improving your financial wellbeing and achieving your financial goals in the long run.
So if you’re ready to take charge of your finances and make some positive changes in the new year, keep reading!
Step 1 – Assessing Your Current Financial Situation
Before you can set your own financial goals, it’s important to have a good look at your current financial situation. This will give you a better idea of where you’re starting from and what areas you need to focus on.
The first step is to figure out your current income and expenses. Gather all your income statements (like pay slips and investment income, which you can easily find online via your internet banking apps) and make a list of your monthly expenses (like rent, bills, school fees, insurance premiums, groceries, and transport). You may wish to do this using an app on your phone, or you may use Microsoft Excel, or a good ol’ fashioned pen and paper. Do whatever works best for you.
Once you have a clear picture of what’s coming in and going out each month, you can take a look at your debts and savings. This includes any loans, store cards, buy-now-pay-later facilities, or credit card balances you may have, as well as any money you’ve got stashed away in your bank accounts. By taking an honest look at your current financial situation, you’ll be better prepared to set realistic and achievable financial goals for the new year.
In addition to your savings, it’s a good idea to make a list of all of your assets, convert them into a common currency, which in my case is Australian Dollars, for ease of tracking, and compare how much you’ve improved by (hopefully) in the last twelve months. This can be particularly motivating to propel you toward your financial goals. Again, you may want to use an app for this, Excel, or a sheet of paper. Personally, I like to use Excel as it allows me to build my own formulas and customise charts to compare years and currency movements but do whatever works best for you.
Step 2 – Setting Realistic Money Goals
Before you get too excited about setting your goals, it’s important to identify your financial priorities and values. This will help you focus on the things that are most important to you and make sure your goals align with your values. Once you’ve worked out your priorities, it’s time to set some goals.
To make sure your goals are realistic and achievable, use the SMART goal-setting framework. That means your goals should be Specific, Measurable, Attainable, Relevant, and Time-bound. For example, instead of just saying “save more money,” set a specific goal like “save $500 per month for the private secondary school fees for my son” OR “save $3,500 per month for my future retirement fund.” By making your goals SMART, you’ll have a clear target to aim for and be able to track your progress.
In addition to making your goals SMART, it’s also important to create a timeline for achieving them. This will help you stay on track and make sure you’re making progress toward your goals. You might choose to set short-term goals that you can achieve in the next few months or longer-term goals that you can work towards over the course of a year or more. Whatever your timeline, make sure to set checkpoints along the way so you can measure your progress and make any necessary adjustments to your plan.
By setting realistic money goals and creating a timeline to achieve them, you’ll be well on your way to smashing your financial goals in the new year. Don’t forget to celebrate your successes at the milestones that you set for yourself as well, as you’ll find this is particularly powerful in motivating you to achieve more.
Step 3 – Make a Plan to Achieve Your Goals
Now that you’ve set your financial goals and created a timeline for achieving them, it’s time to start making a plan to actually reach them. One of the key steps in this process is to create a budget.
A budget is a financial plan that outlines your income and expenses and helps you make the most of your money. To create a budget, start by listing all your income sources and fixed expenses (like rent and bills). Then, make a list of your variable expenses (like groceries and entertainment) and try to estimate how much you’ll spend in each category each month. Once you’ve got a clear picture of your income and expenses, you can start allocating your money toward your financial goals. Here you can decide whether you’d prefer to use an app on your phone, a spreadsheet tool like Excel, or a pen and paper. I would suggest using an electronic system so that you can update it as you need to much easier.
In addition to creating a budget, there are plenty of financial resources and tools that can help you achieve your goals. These might include budgeting apps, financial advisers, or investment tools. Take some time to explore the options available to you and find the resources that best fit your needs. You might also consider seeking support from friends, family, or a financial support group. Having a supportive network can be a great source of motivation and accountability as you work towards your financial goals.
By making a plan to achieve your goals and seeking support along the way, you’ll be well on your way to achieving financial success in the new year.
Step 4 – Staying on Track with Your Goals
Now that you’ve created a plan to achieve your financial goals, it’s time to make sure you’re on track and making progress. One way to stay motivated and accountable is to get a financial accountability partner. This could be a mate, family member, or financial pro who can help you stay on track and provide guidance and support as you work towards your goals. This is a bit like your ‘gym buddy’ to ensure that you both turn up to motivate the other one consistently.
Another way to stay on track is to regularly monitor your progress and adjust your plan as needed. This might involve reviewing your budget, tracking your spending, or re-evaluating your goals to make sure they’re still relevant and achievable. You can use software such as Excel, an app, or another tool that works for you.
As you work towards your financial goals, it’s also important to celebrate your achievements and milestones along the way. This might involve setting mini-goals or rewards for yourself as you reach certain benchmarks. By celebrating your progress, you can stay motivated and stay on track toward achieving your long-term financial goals. So don’t be afraid to take a break and celebrate your success – it’s a crucial part of the journey toward financial stability and success.
By creating a financial plan and setting realistic goals, you can take control of your finances and work towards improving your financial well-being. We encourage you to start making your own financial plan for the new year and to use the tips and resources provided in this article to help you achieve your goals.
Remember, it’s okay to make mistakes and adjust your plan as needed – the important thing is to stay focused and committed to your financial goals. We hope this article has inspired you to start working towards your financial dreams, and we wish you all the best of luck on your journey toward financial success in the new year!
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to Australian professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3
Australian Expatriate Group is a division of Global Financial Consultants in Singapore providing specialist advice to Australians living abroad.
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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.
*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.