Our Tips for Setting Financial Goals for the New Year

Our Tips for Setting Financial Goals

Setting financial goals can help you develop healthy money habits and make smarter financial decisions. Here’s how to set meaningful financial goals—and achieve them—in the year ahead.

For many of us, January presents an opportunity to reflect on our successes and setbacks from the previous year and set intentions for the year ahead.

Indeed, many of us are well practiced in making (and perhaps breaking) New Year’s resolutions. However, setting financial goals may not be at the top of the priority list when the clock strikes midnight on January 1st.

Admittedly, financial goals aren’t always as exciting or motivating as other personal goals, like training for your first marathon or applying for your dream job. But they are arguably just as important—if not more so.

Setting clear financial goals can help you develop healthy money habits and make better financial decisions in the year ahead. You may even feel compelled to make positive changes in other areas of your life as you start to build momentum.

The good news is it’s never too late to set new goals. Here are our tips for setting financial goals you can achieve this year.

When it comes to setting financial goals, consider the following tips and best practices:

#1: Assess Your Current Financial Situation

Setting effective financial goals requires a clear understanding of your current financial situation. Establishing a baseline doesn’t just help you set more realistic goals. It also helps you assess your progress as you work towards achieving them.

Here are a few key metrics you can review to better understand your starting point:


According to a recent survey by OppLoans, 73% of Americans say they don’t regularly follow a budget. Fortunately, you don’t necessarily need a formal budget to succeed financially. However, you do need to manage your spending.

First, review your spending activity from the last year. An easy way to do this is to download an expense tracker app like Mint or Goodbudget. These apps connect to your bank account and credit cards to record and categorize your expenses, making it easier to see where your money goes it month.

Once you have a better understanding of your spending habits, you can identify potential opportunities for improvement.


Your current income can also serve as a helpful baseline for setting financial goals. If you’re finding it difficult to save enough money because of your income and have already cut back your spending, you may want to explore opportunities to boost your earnings this year.

Ultimately, financial success is only possible if you spend less than you earn. Otherwise, headwinds like debt and savings shortfalls can make setting financial goals less than inspiring.

Net Worth

Your net worth can provide a powerful snapshot of your current financial health. If you’re making good choices with your money like saving, paying down debt, and sticking to your investment plan, your net worth will improve over time. But if you tend to spend more than you earn or save, your net worth will suffer.

To calculate your net worth, first tally up the value of all your assets—for example, your home and other property, investment accounts, and anything else you own that has financial value. Then do the same for any debts you owe, whether you have a mortgage, outstanding loans, or lingering credit card debt.

The difference between these two numbers is your current net worth. This number can be an extremely helpful financial goal setting tool, especially if you can identify trends in your net worth over time.

#2: Identify Your Top 3-5 Financial Goals

Setting one or two financial goals for the year ahead may be sufficient if your personal finances are in good shape. On the other hand, setting too many goals can be overwhelming, no matter the state of your finances.

For many people, the sweet spot for setting financial goals is focusing on three to five goals. That way you can address the key components of financial success—for example, spending, saving, investing, and eliminating debt—without setting yourself up for failure from the get-go.

You can use your findings from the previous step to help you set meaningful financial goals. For instance, you may realize you’ve been overspending in certain areas. Therefore, one of your goals may be to rein in your spending and contribute the difference to an emergency fund instead.

Or you may find that you’re in more debt than you thought. If so, you can use a debt payoff calculator to help you set realistic goals for paying down your balances.

Once you’ve decided on your goals, be sure to write them down and keep them visible. According to one popular study, you’re 42% more likely to achieve your goals just by writing them down.

#3: Make Sure Your Goals Are SMART

Setting SMART goals helps ensure your financial goals are clear and achievable. In other words, make sure your goals are Specific, Measurable, Achievable, Relevant, and Time-Bound (SMART).

For example, suppose one of your goals for next year is to reduce your overall debt. Although this is a noble goal, it’s too vague to be meaningful.

For financial goal setting to be effective, you need to set clear parameters around your goals. In this case, setting a goal to pay down your high-interest credit card balances by the end of the year may be better than simply saying you want to reduce your debt. Plus, the clearer your goals, the easier it is to create a plan to achieve them.

#4: Create a Plan to Achieve Your Financial Goals

As the saying goes, “A goal without a plan is just a wish.” Once you’ve identified your top three to five goals, the next step is to develop a clear plan for how you’re going to achieve them. This will serve as your roadmap throughout the year and help you assess your progress along the way.

Building on the example above, suppose your goal is to pay down your high-interest credit card balances by the end of the year. If you’ve successfully calculated your net worth, you already have a clear picture of what you owe.

From there, you can work backwards to develop a plan. In other words, how much will you need to pay towards credit card debt each month to eliminate your balances by the end of the year? Moreover, will you have enough free cash on hand to contribute that amount each month? (If not, you may need to set a more realistic goal.)

No matter your financial goals, creating a plan will help you replace old habits with better ones and guide you in making smarter financial decisions.

#5: Set Yourself Up for Success

Setting financial goals doesn’t need to be difficult, nor does achieving them. Here are a few best practices to set yourself up for success:

  • Think small. This may sound counterintuitive, but the best goals don’t require you to overhaul your entire life. Rather, small, consistent actions tend to produce big results over time. In fact, in his book Atomic Habits, James Clear highlights that if you can improve your habits by 1 percent each day for one year, you’ll end up thirty-seven times better by the end of the year. In other words, aim for progress—not perfection.
  • Automate what you can. If you’ve ever opted for takeout at the end of a long workday instead of the healthy meal you planned to prepare, then you’ve experienced decision fatigue. Indeed, the quality of our decisions tends to deteriorate after a day full of decision-making. Thus, if you must constantly decide to make smart money choices, you’re less likely to do it if you have competing priorities. To improve your chances of success, it’s often helpful to automate as many financial decisions as you can.
  • Acknowledge your wins. Lastly, setting financial goals doesn’t mean you can’t enjoy your money. It’s simply an opportunity to create better habits and make smarter decisions with your money more often than not. Be sure to celebrate your wins as you work towards achieving your financial goals. Acknowledging your successes—no matter how big or small—will help you stay motivated throughout the year.
  • Track your progress. Reviewing your goals and progress towards them regularly can help you stay motivated and inspired. It also allows you to make adjustments if you find yourself falling off track.
  • Be flexible and adaptable. Life is full of unexpected twists and turns. As your life and financial circumstances evolve, your goals may change as well. It’s important to stay flexible, so you can adapt your financial plan to meet your ever-changing needs and objectives.

Setting financial goals is an ongoing process. An experienced financial advisor can help.

You don’t have to go it alone when it comes to setting financial goals and planning for your future. An experienced financial advisor like Benchmark Wealth Management can help you set meaningful goals and develop a plan to achieve them. We can also help you proactively identify opportunities to improve your financial wellbeing and help you make smart decisions for your future every step of the way.

If you’d like to learn more about how we help our clients and if we may be the right fit for your wealth management needs, please contact us. We’d love to hear from you.


About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 20 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional. He holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. Thomas earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

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