Setting Goals and Financial Habits — Do This if You Want to Succeed

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One of my favorite things to do at this time of the year is to sit down and do some reflecting.

Sounds cheesy, I know. But it’s so useful!

At the end of one year and the start of a new one, you have a perfect opportunity. You can look back on a whole year and see what you did and did not accomplish. And you have a chance to start again when January 1 rolls around.

One of the most common themes for New Year’s resolutions is money. We all vow to save more, to pay off debt, to generally be better.

Unfortunately, it’s also common to lose track of our goals about a month into the new year. So today, we want to talk about setting goals that stick.

Do You Set Financial Goals?

A survey from Fidelity indicates that setting goals is one of the best ways to develop good financial habits down the road. According to the survey, 36% of Americans are setting financial goals. I’m personally a goal setter, and never more so than when I’m feeling a financial crunch.

During tough financial times, setting goals is a way for consumers to figure out how they can get back on track. You can set a goal and the reverse engineer to figure out how to reach it.

However, the need to set goals fades as finances improve, and that’s not always a good thing. Even if you feel as though you’re doing better financially, there’s usually room for improvement. Setting goals can also help you make financial progress — and result in better feelings about your finances.

Of those who achieved or nearly achieved their financial goals, 56% claim they have improved finances, while only 34% of those who fell short can say the same. If setting a financial goal can not only improve your finances but also improve the way you feel about money, what’s to lose?

Setting Goals Helps Develop Better Financial Habits

The first step to setting a goal is to decide on a goal and to write it down.
However, before you set a goal, it makes sense to consider your priorities and values.

There are a number of consumers who set goals that don’t really matter to them, which makes it difficult to carry through and develop better habits. If you see that a lot of your friends are paying off credit card debt, but you want to focus more on saving for your emergency fund, go with your gut! When it comes to your money, you don’t need to follow the crowd.

You’re the one who has to live with your finances, so set a goal that aligns with your priorities. Decide what you want to change about your finances, and then set goals that help move you in that direction. Having a clearly defined goal will also help you commit to it.

When setting goals, choose one to work on a little at a time. Setting several ambitious goals at once is a short road to disaster since it’s unrealistic to do everything in one year. Additionally, while it’s natural to set goals as the year turns over, it’s a mistake to get hung up on one time of year. Instead of focusing too much on the end you wish you could achieve, break your goals down into smaller, achievable steps, and make it about the progress.


Here is a great way to set goals. Use the SMART method!

S — Specific
M — Measurable
A — Attainable
R — Realistic
T — Timely

Saying “I want to save more money next year” is not a goal. It’s too vague and there’s no way to determine what “more money” is.

A SMART goal would sound like this: “I want to save $10,000 in my emergency fund by December 2018.” You have a Specific goal that you can Measure. It’s Attainable in the Timeline that you’ve set out. and it’s Realistic.

The Tools to Help

You’re not alone as you set your goals for the New Year. In fact, thanks to the magic of the internet, there are loads of apps that can help put you on the right path.

Here at Investor Junkie, we’ve reviewed a lot of personal finance software. And if you’re just getting started, we’ve found some good solutions.

Personal Capital is a free app that lets you track all of your spending — along with any investment accounts — in one place.

If it’s budgeting you need some serious help with, YNAB is awesome too — it’s awesome for anyone who realizes they need to get their “ducks in a row” in a hurry!

If you want to start saving and investing, Acorns is one of our favorites. It can round up the change from every debit or credit card purchase you make and invest the difference!

What If I Don’t Reach My Goal?

There is always the possibility you don’t reach your goal. But should that stop you from trying? Of course not! And any progress is better than none at all. If you set out to pay off $20,000 in debt and pay “only” $15,000, you’re still so much further along than you were before!

After setting goals that matter to you, breaking them down into achievable and measurable steps and working toward those goals, there is a good chance you will develop at least a few better financial habits. Being able to understand the end game, especially if the goal is something that matters to you, is crucial to making progress on your goals and developing better long-term financial habits.

Positive changes aren’t going to happen overnight. However, the process of setting goals and working toward achieving them can go a long way toward helping you improve your finances.

How do you stay on track with your goals? What kind of financial habit are you creating right now?

Kara Perez

Kara Perez is a freelance personal finance writer. She is the founder of, a company that connects women and money. Kara lives in Austin, TX and believes in the power of budgeting and peanut butter.

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One Comment

  1. I think it’s important to know how to set realistic financial and budgeting goals. It needs to be something you’re comfortable with and works for you. Agreed, you need to think about priorities and values, these will motivate you into handling finances better. I often list down all the expenses I make, because when you actually see it, you’ll realize which ones are unnecessary expenses and therefore, can be eliminated. But don’t plan on budgeting forever. Start with a three-month plan, and then reevaluate your finances.

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