With a new year ahead and the holiday fanfare behind, this is a great time to set money goals, especially if you recently spent a lot on gifts and travel and want to ensure your finances are in shape.
Right now, you may be highly motivated to solve every single one of your money issues in the next few months, but daily life is guaranteed to get in the way.
Your financial to-do list, once so full of promise, can eventually be stuffed in the back of a drawer while you manage more pressing matters.
So, how can you improve your odds of success? It comes down to accepting that you won’t have the time or energy to complete every task to perfection.
Creating a system where you can prioritise, plan ahead and hold yourself accountable can help.
Consider unexpected high-impact actions
Many start by setting a goal to trim frivolous costs, which can certainly be helpful, but there are other ways to make a big difference.
Taylor Schulte, a certified financial planner and founder of Define Financial, an advisory company in San Diego, recommends starting with a few overlooked financial tasks.
Freezing your credit is a quick, easy way to guard yourself against identity theft. It is free to do, and you can temporarily lift the freeze when you are applying for a loan or credit card.
Mr Schulte also suggests looking into umbrella insurance, which offers additional cover beyond what your car, homeowner and other insurance policies provide. This cover can spare you from massive out-of-pocket costs in the event you are sued.
Basic estate planning, including creating a will, is another thing to put high on your list. Putting off this task can create a major headache for your loved ones if something happens to you unexpectedly.
“I know it is a pain point and it is often kicked down the road,” Mr Schulte says.
Focus on what actually matters to you
Many money goals are born out of social pressure.
You “should” want to save up to own a home, even if you are happily renting.
You “should” sacrifice short-term needs and want to stash away as much as possible for retirement, even though it leaves you feeling deprived.
But money goals should be tied to the things that matter most to you. If they are not, you will quickly lose interest.
“If you don’t know what goals to choose, go back to your values and have them guide the goals you set,” says Eric Roberge, a certified financial planner and founder of Beyond Your Hammock, a financial advisory in Boston.
You can combine goal-setting with a little planning, so expenses are less likely to creep up on you throughout the year.
Think about what expected costs will be coming up in the next six to 12 months, such as recurring bills, holidays, anticipated home or car repairs, and other expenses.
This approach allows you to set money aside each month to put towards planned costs, as well as longer-term goals.
Hold yourself accountable
Forgetting your goals can be far too easy, so to make something stick, write it down.
It can be as simple as a handwritten list you keep on the fridge, or online calendar reminders that will nudge you every so often.
For time-sensitive goals, set deadlines. One tactic is to make several lists based on what you need to complete within the next week, month or three months. As time passes and you check off items, you can update the list.
Enlist others’ help, too. Weekly or monthly household money meetings are useful if you are completing financial tasks as a group.
Or share your goals with a trusted friend or family member who can serve as an accountability partner. Looping in loved ones can help to keep you on track.
“We don’t mind letting ourselves down,” Mr Schulte says. “But we hate to let other people down.”
Recognise when ‘done’ is better than ‘perfect’
It is easy to be stuck in decision-making mode when trying to pick a high-yield savings account, credit card or possible investments, but eventually, you need to make a good-enough choice.
Taking action now can have more of a positive effect on your life than waiting until you have painstakingly considered each option.
Mr Roberge says that while he would prefer to optimise every financial decision, he doesn’t because if he did, he would not get things done.
“Everything in moderation is one of the things that I live by,” he says.
“Going to extremes in any one thing, at the detriment of other things that are important, doesn’t work long-term.”