With the new year approaching, it is never too early to start planning your 2022 New Year’s resolutions. One area that you should include in your resolutions is a financial goal. Setting financial goals can help you stay motivated and keep you on track with any money-related goal.
When setting a financial goal, you need to have a specific goal that you write down along with an action plan on how you’ll reach this goal. To know what financial goal or goals you will have for the new year, look around at your life. Will your phone or computer need an upgrade? Do you have credit card debt or student loans you want to pay off? Do you want to stop silly spending and have an emergency fund?
Once you have a financial goal, write down that goal in more detail with an action plan. If your goal is to save an emergency fund, you need to define what an emergency fund is. For some, it is 3 months of expenses and for others, it is 6 months. You might decide 3 months is the right emergency fund. Now your goal is to save a 3-month emergency fund. This is more specific, but you need to now add an action plan. Do you want to save your 3-month emergency fund by mid-2022? Do you know exactly how much you want to put away each month? Add this information to the goal. Your goal should look like this now: I will save a 3-month emergency fund by mid-2022 by saving $1,000 every month for 6 months.
You can do this for any financial goal you have at any time of year!