How to Create Successful Financial Resolutions

As we step into a new year, it’s not just about embracing new resolutions for a healthier lifestyle or reading more books; it’s also a great time to create successful financial goals. We will explore the importance of setting financial goals, tips for effective goal-setting, and strategies to help you turn those aspirations into tangible achievements.

Reflecting on the Past Year

Begin by reflecting on your financial journey in the past year. What were your successes and challenges? Assessing the past will provide valuable insights into what worked well and what areas need improvement. Examples: Did you reach your savings goal?  Did you get to go on that dream vacation? Did you qualify for a great loan to buy that car you wanted?

Setting SMART Financial Goals

SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound. Apply these principles to your financial objectives. Instead of a vague goal like “save more money,” consider a specific target such as “save $5,000 by the end of the year.” This clarity helps you stay focused and motivated.

Building an Emergency Fund

Start the year by prioritizing your financial security. Establish or strengthen your emergency fund to cover unexpected expenses. Aim for three to six months’ worth of living expenses, providing a safety net for unforeseen circumstances. This fund is to be used only for emergencies, not for everyday purchases.

Creating a Budget

• Develop a realistic budget that aligns with your financial goals. Track your income and expenses to identify areas where you can cut back and allocate more funds towards your objectives. 
• The 50/30/20 rule is a good rule of thumb. 
• 50% of your take-home pay should go to your needs, such as:
  • Rent/mortgage
  • Utilities
  • Transportation
  • Groceries
• 30% of your take-home pay should go to your wants, such as:
  • Travel
  • Entertainment
  • Electronics
  • Dining out
  • Clothing
• 20% of your take-home pay should go to paying down debt or savings
  • Emergency fund
  • Savings account
  • Education savings
  • Pay down debt

Apps can simplify the budgeting process if you aren’t a pen-and-paper type of person. 

Investing Wisely

Diversify your investments and consider consulting with a financial advisor to create a strategy tailored to your goals and risk tolerance. Whether it’s saving for retirement, a home, or your children’s education, smart investments can significantly impact your financial future.

Reducing Debt

Make a plan to reduce and eliminate high-interest debt. Whether it’s credit cards, student loans, or other obligations, strategize on paying them down systematically. Focus on high-interest debts first to save on interest payments.  We encourage you to reach out to us about a Personal Installment Loan if you have a major expense coming up or want to consolidate some of your high-interest debt. 

Learning and Growing

Commit to enhancing your financial literacy. The more you know about personal finance, the better equipped you are to make informed decisions. Read books, attend workshops, or follow reputable financial blogs to stay updated on the latest trends and strategies.  Please know that we at Waypoint Bank are always here to help you and answer any questions. 

Regularly Review and Adjust

Financial goals should not be set in stone. Regularly review your progress and make adjustments as needed. Life circumstances and priorities may change, requiring tweaks to your financial plan, which is okay!

Embracing the new year with a focus on financial goals can pave the way for a more secure and prosperous future. You can turn your financial aspirations into reality by setting clear objectives, practicing financial discipline, and staying adaptable. Remember, it’s not just about the destination, but the journey of financial growth and empowerment. Here’s to a year of financial success and newfound opportunities!

Since 1883, Waypoint Bank has provided superior financial solutions, promoting the small-town approach of putting relationships first. For 140 years, we’ve been earning your trust in the most friendly and professional manner possible while guiding your success.