Your financial goal-setting recipe

It’s that time of year again: New Year’s resolutions are in full swing and the ‘wind of change’ blows with ready force. But we all know what happens next: as time goes by, resolutions tend to become a distant, blurry memory rather than a set of goals.

Is 2023 the year you make your financial resolutions stick? Here’s how you can do it, according to experts.

Break big goals into smaller ones

Setting big goals can be exciting and thrilling, but it can also turn into an overwhelming experience. If your goals are too big, it might feel like you’re not getting there fast enough, which can lead to frustration and deflate motivation.

That doesn’t mean you shouldn’t aim for the stars. According to experts, it comes down to taking ‘baby steps’ towards your goals. For example, if your goal is to save $10,000 for a new car within a year, it can be a good idea to break it down and aim to save $1,000 a month, or $250 a week.

Making small, consistent progress will help you feel more motivated. To streamline your efforts, you can also consider setting up automatic transfers from your main bank account to a savings account.

Are your goals measurable?

Another key thing is to set measurable goals, as this interesting article highlights. After all, if your goal isn’t measurable, how would you know if you’ve achieved it?

For example, instead of saying ‘I’d like to save more’, make sure you determine how much you want to save, with specific criteria to measure your progress.

Of course, the same concept applies to other types of goals. Rather than aiming to ‘run more’, set yourself a goal to run 5 km in less than 40 minutes. Instead of planning to finish a novel’, aim to write 500 words a day, and so on…

Try to be as specific as possible, focus on achievable goals, and importantly, make them time-bound.

Understand your personal motivation

This may sound a bit obvious, but you need to make sure that your goals are relevant to you. In other words, you need to understand the ‘why’ behind them.

As Health Navigator, setting goals that draw on personal motivations leads to a greater sense of ownership over the process, and more lasting changes in behaviour. On the other hand, if you aren’t saving for a reason and are just setting a goal because you think you should, you might not have enough motivation to keep going.

Reminding yourself why you’re doing it can help propel you forward through moments when your drive or focus wane.

Reward yourself for each subgoal

You may be focusing on the end-goal, but why not also acknowledge your hard work with small self-rewards along the way?

Research found that having a reward to look forward to helps release dopamine, a neurotransmitter made in the brain that makes you feel good and motivated. As you hit key milestones towards your goals, make sure you take a moment to celebrate your wins.

Adjust as necessary

Circumstances change, so it’s crucial that your goals are flexible enough to move with them. If you’re slipping behind, think about what’s not working. Are the goals unachievable, or do you no longer have the same ability to achieve them? Sometimes, a small adjustment is all it takes to get back on track.