How to Set Financial Goals for Success in 2024

Now that January has arrived, it’s an excellent time to create intentions around financial well-being and building a more prosperous future for yourself. Financial wellness is closely linked to overall personal health, and can be defined as a state in which you’re able to fully meet your money-related needs, and have a sense of financial security and freedom of choice that will allow you to enjoy life now, and in the future. Begin charting a course for success in 2024 with these tips on practical financial goal-setting:

Assess your finances as they stand now.

To effectively monitor and evaluate your progress, make sure that you have an accurate understanding of your current finances. Knowing where you stand will enable you to acknowledge and celebrate your achievements throughout the year. And recognizing your gains is not only rewarding, but it can also provide motivation for greater wins on the road to greater financial security and wealth.

Make use of digital money management tools.

If you didn’t review your overall financial position as 2023 wrapped up, getting a handle on it now will give you a logical point from which to set new intentions. To get a holistic perspective on your finances, make sure to examine key metrics including your net worth, debt levels, savings, value of your retirement portfolio and any other investments, net income, living expenses, and credit profile.

Less than enthused about performing what may sound like a fussy, detailed analysis of your finances? Take advantage of free and secure money management tools like The Police Credit Union’s MoneyTrac, which will make the process simple and streamlined. With real-time updates and the ability to easily combine data from your various accounts, MoneyTrac gives you a complete picture of your overall financial position under a single login. What’s more, it can be used to set and monitor goals in critical areas of financial health, such as building a budget and tracking your spending, managing debts, reviewing investments, calculating your net worth, and more. And to stay on top of your credit health, keep in mind that you can view your FICO® Score in Digital and Mobile Banking, along with information on key factors affecting it, and what specific actions you can take to improve it.

Set SMART Goals

When defining your financial aspirations for the new year, apply the SMART model for needed structure that will keep you on track, and improve the likelihood of your success. Essentially, this means ensuring that your objectives are specific, measurable, achievable, relevant, and time-bound. To put this method into practice, consider the following as you devise your goals:

Specific and measurable:

Are your goals clear and well-defined so that you know what actions to take? In addition, is there an objective way to determine if you’ve achieved them? Framing your intentions this way will help you to establish direction and foster momentum, and will motivate you to adjust your targets as you make progress.

To illustrate, a specific and measurable objective might be to establish an emergency fund that will allow you to cover three to six months’ worth of living expenses. You might plan to start by saving $1,500 in six months, perhaps by setting up ongoing transfers from your checking account to a dedicated savings account (or another savings instrument).  Alternatively, you might decide to use direct deposit to have a portion of your paycheck sent directly to a savings account.

Once you’ve met your initial goal, you might aim to level up your savings to $5,000, perhaps by making larger or more frequent automatic transfers, and by opening a money market account, which will typically provide a higher annual percentage yield (APY) than a standard savings account. Whatever way you decide to build your financial safety net, specifying your intent will be much more effective than a vague assertion to save more money in 2024.

Achievable:

To stay committed and inspired, it’s essential to create financial milestones that are within reach. Setting unreasonable goals can easily dampen your outlook and inhibit your progress, or even cause you to get burned out and give up. For instance, if you carry a lot of high-interest debt on multiple credit cards, it may not be realistic for you to eliminate the balance on all your credit card accounts within six months. However, you may find that a reasonable goal would be to pay down the balance on your card with the highest interest rate within that same timeframe, using what’s known as the “debt avalanche” repayment strategy.

Relevant:

When determining if a financial goal is relevant, ask yourself if it significant and meaningful in terms of your vision for your life. Ideally, these goals will benefit you now or in the near-term, and will also strengthen your long-term financial health. As a case in point, a plan to remodel your kitchen can enhance your enjoyment of your home, and it can also increase the resale value of your property. As another example, paying down high-interest credit card debt will free up money in your budget that you can put toward savings or investments, or to acquire assets that will appreciate and potentially provide you with income at some point in the future. But reducing your revolving debt is also likely to markedly improve your credit score fairly quickly, since you’ll have effectively lowered your credit utilization (provided that you do not close these accounts, which can negatively impact your score).

Time-bound:

Lastly, don’t overlook the importance of setting a timeframe for your financial goals. If you don’t set a target date, you won’t have an effective way to hold yourself accountable. Even if you need to adjust your deadlines, it’s essential to have them in place in order create a feasible plan to accomplish your objectives. Whether you’re saving for a short-term goal like a family vacation, or are working toward a longer-term dream like buying a home, you’ll get further much faster by not skipping this step.

Set aside funds that will grow safely and provide convenient access whenever you need liquid assets.

Open a Money Market Account