With the new year upon us and holiday cheer behind us, it’s a great time for setting money goals.
While you might be motivated right now to resolve all your money problems in the next few weeks, everyday life will likely get in the way. Once full of promise, your financial to-do lists can end up in the back of a drawer as you deal with more pressing matters.
How can you increase your chances of success? Accepting that you will not have enough time or energy to do every task perfectly is key. It can be helpful to create a system that allows you to prioritize, plan ahead, and holds yourself accountable.
Consider unexpected high-impact actions
While many people start by setting a goal for cutting frivolous expenses, this can be very helpful. But there are many other ways to make a difference. Taylor Schulte is a certified financial planner who founded Define Financial in San Diego. He recommends that you start with the most basic financial tasks.
It’s quick and easy to protect yourself from identity theft by freezing your credit. You can temporarily lift the credit freeze while you apply for a loan, or credit card. Schulte suggests that you look into umbrella insurance. This provides additional coverage beyond the auto, homeowners, and other insurance policies. In the unlikely event that you are sued, this coverage could save you a lot of money.
Another thing you should prioritize is basic estate planning. This includes creating a will. If something unexpected happens, putting off this task could cause a lot of headaches for your loved ones. Schulte states, “It’s a pain point that’s often kicked down to the road.”
It’s important to pay attention to what you spend, but it is also important to take steps to protect yourself, your family, and your loved ones.
Get to the heart of
Social pressure can lead to many money goals. Even if you are happy renting, saving up for a home is something that you “should” do. Even if it means you feel deprived, you “should” give up short-term wants and needs to save as much money as possible for retirement. Money goals should always be tied to what is most important to you. You’ll lose interest if they aren’t.
Eric Roberge is a certified financial planner who founded Beyond Your Hammock in Boston.
It is possible to combine goal setting with some planning so that expenses don’t creep up throughout the year. Consider what expenses you can expect to incur in the next six-to 12-months. These could include recurring bills, vacations and home or car repairs. This allows you to save money each month for planned expenses and longer-term goals.
It is easy to forget your goals. Write it down. You can keep a list on your fridge or use online reminders to remind you of your goals every now and again.
For time-sensitive goals, set deadlines. You can make multiple lists depending on the tasks you have to complete in the next week, month, or three months. You can add items to the list as you go along and check them off.
Ask for help from others. If you are working together on financial tasks, it is a good idea to hold weekly or monthly household money meetings. You can also share your goals with a trusted friend, family member, or a partner in accountability. It can be helpful to keep track of your goals by involving loved ones. “We don’t mind letting ourselves down,” Schulte says. “But we hate to let others down .”
Know when ‘done is better than perfect
When you’re trying to choose a high-yield savings or credit card, it can be easy to get stuck in decision-making mode. But eventually, you have to make a good enough choice. You can make a better decision now than waiting to carefully consider each option.
Roberge states that even though he would prefer to optimize every financial decision he makes, he does not because if he did, it wouldn’t be possible for him to get things done. He says, “Everything in moderation” is something he lives by. “Going too extreme in any one thing at the expense of other important things doesn’t work long term .”
This article was written and published originally by The Associated Press by NerdWallet.