New Year\u2019s Resolutions: How to Set and Achieve Specific Financial Goals in 2020 I want to lose weight. I want to save more money. I want to get out of debt. I want to quit smoking. At the start of a New Year \u2013 and in this case, a new decade! \u2013 many people set New Year\u2019s Resolutions. Although well-intentioned, these goals fail weeks later. It\u2019s often because these resolutions are far too generic and lack proper planning. Unsurprisingly, personal finance ranks high up on common New Year\u2019s Resolutions. Thirty-two percent of Canadians said they pledged to improve their financial health, according to a Tangerine poll. Twenty-eight percent pledged to commit to better money management, 45 percent want to spend less, 41 percent want to save more, and 31 percent want to pay down credit card debt. So how do you turn wishful thinking into tangible, concrete goals you can achieve in the next calendar year? Here\u2019s how to set legitimate financial resolutions, and plan for a solid path to the finish line. Create SMART Goals Whether it\u2019s weight loss, paying off debt, or eating healthier \u2013 set SMART goals, which means ones that are specific, measurable, attainable, realistic, and timely. Getting specific is a two-pronged approach. First you need concrete numbers, if you want to save money, start an emergency fund, or pay off debt, for example. You also need a reason why you\u2019re doing this. Erase the vague \u201cI want to save more money\u201d and swap it for \u201cI want to save $5,000 in 2020.\u201d Instead of saying \u201cI want to pay off debt,\u201d offer up an amount such as, \u201cI want to pay off $5,000 of credit card debt.\u201d Suddenly, you\u2019ve set a specific target so that you know what you\u2019re working towards this year. You also need to understand why you\u2019re setting this goal, which you need to be specific about. This is part of the equation that is often overlooked but incredibly important. Are you saving up $1,000 for an emergency fund because you\u2019re worried about your job situation? Maybe you\u2019re paying off $5,000 in debt because you want to be debt-free within the next three years. A simple number with no personal meaning is just as bad as saying, \u201cI want to save more.\u201d Understanding the why keeps you motivated as you truck on with your resolutions after the New Year\u2019s excitement wanes away. Measurable and timely goals are easy to track because they\u2019re specific to start with. With a vague resolution such as \u201cI want to save more,\u201d you have no idea if you\u2019re faring well or not. You could save $20 by year-end but is that a measure of success? On the other hand, if you\u2019re hoping to save $12,000 by the end of the year, you\u2019ll know that at the six-month mark, you should have at least $6,000 saved and $3,000 at the three-month mark if you want to stay on track. That may be unrealistic, but you won\u2019t know you\u2019re off track if your goals aren\u2019t measurable. Breaking your goal into smaller chunks makes the resolution far more approachable. Telling yourself you need to save a $50,000 down payment is intimidating. But committing to $17,000 a year \u2013 or about $1,400 a month makes the goal much more realistic. 6 Things No One Tells You When Buying a House If you\u2019re paying off your student loan over the course of three years, you\u2019ll have multiple checkpoints along the way to measure your progress. If you have short-term goals \u2014 that are typically complete within the year \u2014 you\u2019re creating benchmarks every month or quarterly at the latest. It\u2019s your job to keep temperature checking your goals to make sure you\u2019re staying on course. \u2018M\u2019 could also stand for mutual if you\u2019re setting goals with a partner. Make sure you\u2019re both on the same page when you etch out your goals. Figuring out if your goals are attainable and realistic lies within your budget. After crunching numbers, some goals may not be realistic without tweaking your deadline. If a $5,000 African safari trip is on your bucket list, working towards it in three years instead of one, for example, may be doable. Telling yourself you need to wipe out your mortgage within the next five years when you simply don\u2019t earn enough to do that isn\u2019t setting yourself up for success. Consider all of your expenses for the year ahead, including your fixed expenses and all of your discretionary spending. How much is left over at the end of the month and where do you want to allocate these funds? Your goal should be challenging but attainable. You could commit to make sacrifices in some categories, such as eating out, shopping, or travel, to achieve your goal. You could even look into generating a second income by renting out your spare room or doing some consulting work to help with your goals. As the saying goes, you can have almost anything you want, you just can\u2019t have everything. How Many Goals Should You Set for Your Money? Setting goals for your money can become addictive, but you don\u2019t want to get carried away. When you\u2019re getting started, your best bet is to set one short-term (completed by year-end), one medium-term (completed within 3 - 5 years), and one long-term (5 - 10 years) goal. But keep in mind, your income and overall situation may determine what you can fit into your budget. If your budget is tight already, and you have many debts to tackle, your first priority should be wiping out your high-interest debts because they will get in the way of achieving other goals. Remember \u2013 it\u2019s completely okay to set modest goals too. You may want to wipe out your highest interest credit cards or eliminate your credit card with the biggest outstanding balance. The avalanche or snowball strategy can help you. For other people, creating a $500 emergency fund by year-end is a great goal that could help down the road. Make Your Goals Stick Once you\u2019ve got a specific goal tethered to a solid reason why you\u2019ve set it, write both components down. Some examples could be, \u201cI want to save $1,000 this year to pay for a new laptop next year\u201d or \u201cI want to pay off $5,000 of my credit card debt so I can be debt-free and focus on my financial future.\u201d People who put their goals in writing are more likely to achieve them. When someone is trying to lose weight, they\u2019ll often place images of their ideal self on their fridge. This applies to your financial goals, too. Stick images of the house you\u2019re saving for, or your dream holiday, to your wallet, debit card, or credit card so that each time you whip out your credit card, you\u2019ll think twice. Keep these resolutions and your plans to achieve them as a note on your smartphone, a Post-It note on your computer monitor, or save the picture as your wallpaper or screensaver. Some savers take it to the next step: they write their goals on their bathroom mirrors, so each morning they wake up with their goal in mind. How to Turn Resolutions Into Results One of the Best New Year\u2019s Resolutions & Goals You Can Set \u2013 Improve Your Financial Literacy One of the best goals to include in your New Year\u2019s Resolutions is to increase your level of financial literacy. Attend one of our free workshops or webinars, read blogs and books, listen to podcasts, ask professionals (e.g. bankers, accountants, mortgage brokers, or insurance agents), or talk to trusted friends and family. The more you learn the easier it gets to manage your finances and spot the difference between the good and bad financial information out there. And if you ever want a free, confidential, no-strings-attached second opinion, contact us for an appointment with one of our professional Credit Counsellors. We\u2019re happy to help you reach your financial goals and establish the foundation for a strong financial future.