Goal Setting and New Years Resolutions
If you’ve been following along with this blog series about setting New Years Resolutions this is part 2. If you haven’t already read part 1 you can catch it here.
Step 4 – Set up your sinking funds
Read my detailed post here on what sinking funds are and how they work. Based on what big costs I have in the coming year, I set up my sinking funds in my budget and I set up a standing order to transfer the amount each month to a deposit account. You can use sinking funds for things like annual costs, Christmas, back to school, travel/holidays, special occasions such as birthdays, anniversaries or weddings. If your expense is due in October, then you have until September (9 months) to save for it so divide the forecasted expense by 9 and save this amount each month into a sinking fund so you are ready when the expense becomes due.
Step 5 – Know your minimum savings percentage
Your income may fluctuate month to month but you should know your minimum savings percentage. This is the minimum percentage amount each month (or pay period) that you will save no matter what. If things are going well for you in that month, you can always increase your savings, but commit to a minimum % of money that you will save no matter what.
Step 6 – Set financial New Years Resolutions (+ non-financial)
When setting goals (financial or otherwise) the number 1 piece of advice I have to offer is to be specific. Goals such as “be better with money” or “get on top of my finances”. For example one of your goals may be to start saving an emergency fund. To increase the likelihood you will meet this goal, select a specific amount and time-line and adjust budget accordingly. For example, if you want to save €600 by the end of June, your goal should be to save €100 per month from January to June.
If you’re in need of inspiration, here are some ideas of New Years Resolutions for 2020:
- Saving €X amount by Y date for Z goal
- Invest €X amount every month into Y fund
- Pay off €X in debt by Y date
- Reduce spending on ABC to €X each month
- Cut out spending on ABC entirely
- Declare a spending limit of €X per month on ABC category
- Commit to not using your Credit Card
- Aspire to perform a budget review each week or month
- Aim to track your spending for a defined period of time
- Increase your income by €X by undertaking A, B or C activity each week or month
The last point I really want to make and emphasise it to set yourself up for success. Make it easier on yourself to reach your goals. Some of my top tips to be victorious are:
Tip #1 – Automate
Automate as much as possible in your life. Set up e-billing for all your accounts and utilities. Pay every possible bill or bank transfer by standing order or direct debit.
Tip #2 – Make hard to go wrong and easy to go right
Set up reminders in your phone for tasks and to-dos. Each time your finish with a recurring appointment, immediately make your next appointment before you leave for example, at your dentist appointment make your next dentist appointment and record it in your calendar right away.
Tip #3 – Consider an Accountability Partner
Often times we are more likely to stick to our goals and new years resolutions when we share them with other people. Find someone you can trust to share your finances and goals with and go on a personal finance journey together. Alternatively consider a personal finance coach to keep you on track, you can read about our coaching offering here.
Now would be a fantastic opportunity to start preparing yourself for 2020 and setting up new years resolutions for you to smash! Start the decade with a bang.