2020 brought unprecedented uncertainty, hardship, and financial strain for many. You're not alone if the idea of digging deeper into your finances or setting a big money goal makes your breathing quicker and your palms sweat. But there’s no better time than right now to take a deep, honest look at your finances and set achievable goals.
No matter what financial goals you choose, big and small steps like these can help you regain your footing, kick-start healthy financial habits, and make a crucial difference in your future financial well-being.
1. Determine what you want from your money.
From funding a college savings account to planning a big vacation, your first step is to know what you want your money to do for you. As you plot this out, distinguish between short-, medium-, and long-term goals, recommends Christian Hutchins, CFP, AIF, senior wealth advisor at LourdMurray. Consider goals such as building retirement savings (long term), saving for a down payment (medium term), and purchasing a new computer (short term).
“My view is that a goal without a deadline is not really a goal,” says Ken Moraif, CFP, senior adviser at Money Matters in Dallas, Texas.
More than that, overarching goals, like “save more” or “spend less” are too sprawling to execute. Moraif recommends chopping down big goals into action items. “You need to create milestones and a timeline of what it takes to complete,” he says. With those nitty-gritty details in place, goals can become reality.
Getting started: For each of your goals, consider the amount of money you’ll need to accumulate, the time horizon, and the required steps to make it happen, says Moraif.
2. Make a date with your statements.
People are out of the habit of balancing checkbooks, notes Hutchins. Most of us happily ditched paper bills in favor of online banking—and that convenience can’t be beat. Still, says Hutchins, it’s a good idea to review statements to ensure that every item is something you actually bought. He encourages keeping an eye out for small incremental charges (that $0.99 charge from iTunes, for instance) that are often an easily missed sign of a hacked credit card.
Getting started: Try putting it on your calendar as a once-a-month appointment to review your credit card bill and bank statement. Rewarding yourself with a treat—an afternoon latte, for instance, or an extra-long walk through the park—can make this task less onerous.