Most people joke about New Year’s resolutions, because so many people abandon them before the end of January. The problem is that most people come up with a huge goal, and leave it at that. They do not create a plan, and break it down into manageable chunks and then they do not follow through with the changes necessary to make that goal become a reality. Financial goals are an important part of financial success whether you make the goal in January or in June and you need to come up with a viable plan to make sure you follow through on the goal.

Set Realistic Goals

One common goal is to get out of debt or to pay off your credit cards. If you are more than $30,000 in debt, and you only make $40,000 a year, you will not be able to pay off your credit cards and live over the next year. Instead you should make a goal to greatly reduce your debt by a set amount each month. By looking at your budget you should be able to come up with an amount that you can do each month. It’s okay to cut back on your lifestyle to reach your goals, but you do need to cover necessities first.

Another thing is to make sure the cuts you want to make are realistic. If you currently spend $800.00 a month on groceries, you may find it difficult to cut back to $400.00 a month right away. You can scale back a little bit at a time to make sure you can realistically achieve the goal you want to set.

Create a Plan

You should break your larger goal down into smaller more manageable chunks. For example if you want to buy a home in the next few years, you will need to work on getting rid of the majority of your debt, saving up a down payment and saving up an emergency fund to cover home repairs. Each of these steps will help you achieve your ultimate goal of home ownership, but you only need to focus on one at a time so you do not become overwhelmed.

If you are working towards a financial goal you need to have a working budget in place. The key being that it is actually working and you are following it each month. The budget allows you to find extra money and it allows you to make sure that your spending habits match your priorities. You should make managing your budget your top priority. If you have never done a budget this may be the perfect goal for the next year.

Reward Yourself

As you break down your goals into smaller steps, create rewards you earn at each milestone. At the beginning of the journey you may need more motivation, so you may make the milestones closer together. At the very end of the goal, especially if it takes you a long time to reach it, you may need to give yourself additional motivation to follow through.

Find Support for Your Goals

If you are married, you and your spouse should work together to reach your financial goals. This may be enough support, but if you find you are struggling consider enrolling in a financial class such as Financial Peace University from Dave Ramsey or Money Map Coaching from Crown Financial. These services can help you find support as you work towards your goals. You may need to leave behind old habits such as social shopping or eating out to reach your goals, and it can cause your friends to react. Your good friends will support you through the decision to reach your financial goals.

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