Invest Financial Planning

How To Crush Your 2021 Financial Goals — No Resolutions Required

Arielle Lapiano  |  January 22, 2021

About 80% of resolutions will fail. But, newsflash: you don't need 'em. Here's how to reach your financial goals in 2021.

January always starts strong as we share resolutions and financial goals to get healthier and wealthier (and maybe wiser, too?) only for our good intentions to melt away by mid-February… or certainly by March. Sound familiar?

Here’s the thing: While the New Year is a great time for us to make changes, it’s technically just another date on the calendar like any other. We shouldn’t pressure ourselves to make extreme overnight changes to our financial lives that aren’t realistically sustainable. The name of the game with lasting change is realistic baby steps. And we figure out what those are by focusing our energies on the core of what we want to change in our lives — no resolutions required. Here’s a look at how to identify the baseline issues you want to improve, and work on a better tomorrow for all facets of your life.

TAKE INVENTORY (BEFORE SETTING FINANCIAL GOALS)

“If you don’t know where you are starting from, you can’t know where you can go,” says John Caserta, chartered financial consultant and Managing Director of Caserta & de Jongh.  He suggests conducting a financial inventory of what you have, before making any plans or goals. Great advice to help you grow your bank account, or advance other areas of your life. Indeed, Caserta explains, “It’s the equivalent of stepping on the scale.”

“Be honest. Be brutal,” with your assessment, says Brannon T. Lambert, financial expert with Canvasback Wealth Management. Studies show that we under-report our spending by an average of 20%, so he suggests making a detailed list of debts with balances, interest rates, minimum payments and tracking spending. Another thing we underestimate is how much we eat.

And taking inventory applies across your financial goals for 2021. For instance, if you’re focused on improving your health, you might want to get a checkup with your doctor, snag a free assessment with a trainer, or track your calorie consumption with a food app before you commit to running a marathon or losing 50 pounds.

Takeaway: Whatever your aspirations are for 2021, start with taking stock of where you are now related to those goals, and how long it’s going to take you to get there if you’re taking it one day at a time.

KNOW YOUR WHY

“What do you want to accomplish in 2021 and why?” is one of the key questions to ask yourself, says Dawnette PalmoreFinancial Wellness Coach. Answering this question will help you prioritize what you want out of 2021, and is also “one of the most vital steps to financial success,” she adds.

Takeaway: Identifying that you want to save money or get a promotion in 2021 is one thing, but recognizing that your “why” is to save money to allow for your financial freedom, or to get a promotion is to fund your daughter’s dream of going to Harvard, are much more powerful than just identifying the accomplishment or financial goal.

START SMALL

“Commit to something small,” says Caserta. For instance, if you want to increase your savings, don’t target $1,000 a week, he urges. Rather, start with smaller, easier-to-achieve goals, for instance, maybe just target $10 in savings a week. “It’s easier to walk before your run,” he says.

The name of the game is taking small steps towards bigger financial goals.  “Be ambitious, but also realistic,” says Simon Read, CEO of PPS Advisory.

Takeaway: Small commitments increase your chances of success and give you the momentum to keep going.

PLAN

“For whatever you’d like to achieve in 2021, be sure to have a thoughtful plan for how to achieve it,” says Amanda Wallace, Head of Insurance Operations at MassMutual. “As the head of operations at work and for my household of six at home, there’s one thing I know with confidence: Whatever you hope to achieve, without a plan, there is a high probability of it not being achieved,” she adds.

So, say you want to start running. Make a plan to lace up two to three times a week, schedule your times and try to find a buddy to do it with. Looking to transition to a new career? Plan to research and reach out to one contact a week on LinkedIn who might help you out.

Takeaway: Make mini-plans that can move you closer to your aspirations for 2021.

GET 2020 2021 VISION

Sports research suggests that visualizing specific outcomes can make them more likely to occur. While you can’t just picture touchdowns for your life and magically manifest them, there is something to incorporating visualization into your overall planning process, especially when you can take the visualization from something inside your head to something concrete. Actor Jim Carrey, for instance, credits writing himself a check for $10 million for “acting services rendered,” dated five years out, as instrumental to his success.

Vision boards are a great (and fun) way to tangibly “see” your financial goals and aspirations for 2021. No need to go full out Martha Stewart (but go here if you want to). Paper, magazine clippings, your best handwriting, along with your imagination is all you need.

Takeaway: Knock your 2021 goals out of the park with images, words, and inspiration to help your brain believe anything is possible.

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