By Mario Gutierrez, Director, Financial Empowerment & Advocacy Unit
Every new year, we have a natural opportunity to revisit our relationship with money. This could be your year – the year where things start to get better financially, and you begin to find a place of peace and stability. As it turns out, a simple (yet powerful) step to increase your chances of making this happen is writing down your goals!
Many studies have confirmed the positive impact of creating and committing to goals. According to this article, neuropsychologists indicate the process of thinking about your goals and writing them down creates vivid images that you are able to remember and put into action.
We want 2023 to be the year you jump start your financial goals. Let’s explore how you can start.
- Understand the importance of goals
Setting goals is important because it provides an endpoint for your efforts. The goal represents the prize at the end of a struggle. By committing to a target, you can design a plan to get you there. Another way of seeing it is that without goals, you might end up just drifting through life without any clear direction.
Some additional benefits of setting goals are:
- Reduce frustration by creating realistic expectations
- Increase motivation and direction
Goal setting is the centerpiece of the financial counselors’ work. Every client we serve identifies a goal that they want to work towards. It doesn’t matter if they are dealing with unmanageable credit card debt or trying to get better at managing their paycheck, the goal is the most important discussion to have to move forward.
2. How to set achievable goals
a. Make them meaningful: One best practice with goal setting is to choose something that is positive and means a lot to you. For example, you might decide that this is the year you eliminate your credit card debt. That’s great, but we’ll want to dig deeper to understand what it will look like if you no longer have that debt. What would you do next? That’s the ultimate goal we’ll want to work towards.
- Tip: This article from the IllumiLab provides additional tips on how to make your goals meaningful.
b. Make them realistic: For example, if you are trying to save $1,500 to move to a new apartment and can only save $150 a month, you can mentally prepare to wait ten months to accomplish your goal. Rather than planning on moving out in six months only to realize you could not possibly have saved enough money to do it. Making a goal that is too ambitious could backfire and mentally set you back. Start small and celebrate the small wins.
- Tip: Writing down SMART goals can help you find a realistic approach to your goals. To learn more about what SMART goals are, check out this resource from the University of California
c. Make a plan to achieve them: Finally, consider how you would achieve the goal. This is where a financial counselor can come in and help. We’ll want to figure out what needs to be done to reach the goal, identify potential obstacles, and set a plan to deal with them.
Setting up goals, committing to them and adopting positive financial habits take time. However, there is no better time than now to make your dreams a reality. Let’s embrace the new year by setting meaningful and achievable financial goals!
Still have questions?
Financial counselors can help you draft your financial goals and keep track of them over time. NYLAG Financial Counselors can also help you develop a plan to control your spending and start your savings.
If you are currently working with a NYLAG financial counselor and have questions, reach out to them. If you are not working with us yet, click here to connect with a NYLAG financial counselor.