This post is sponsored by Lexington Law.

We are nearing the end of 2019 and heading into not just a new year but a new decade.  This is a great time to take a step back and create financial goals to set yourself up for success.  In this post, we are going to cover nine steps to ensure that you’re holistically looking at your goals, have a concrete plan, and get the support you need along the way.

Identify Your “Why”

Before setting goals, financial or otherwise, it’s essential to get in touch with your “why.”  If we don’t know why we are doing something, it’s very hard to stick with it, stay motivated, and follow through.  There is no right or wrong “why”, as long as your reason for wanting to achieve your goal is something that motivates and excites you.

Once you’ve identified your why, take note of it and surround yourself with positive reminders to keep you motivated when you need it.  This could be in the form of:

  • Quotes on your bathroom mirror
  • Vision board
  • Pictures of what you are saving for or what you plan to do when you’ve paid off a debt

Reflect on Your Previous Year

I am a huge fan of goal setting, but it’s so easy for me to get in the “go big, go home mentality.”  This is where I have been known to set unrealistic goals and feel pressured to achieve them. When this happens, it’s hard to stay motivated because it’s such a lofty goal for the time frame I set.  In other words, I’ve set myself up for failure before I even begin.

To avoid doing this (or at least to be more realistic about my goals), I reflect on the past year and ask myself:

  • What worked?
  • What didn’t work?
  • Was this goal realistic?
  • What barriers were present that were in my control?
  • What could I do differently to remove the barriers?

In a post on Lexington Law’s blog, they review six ways that you might be unintentionally sabotaging your savings. Small actions, avoidable barriers, and unrealistic goals might be getting in our way of achieving financial stability.  Without knowing it, we might be our own barriers to financial success.

Identify Where You Stand Financially

After you’ve reflected on your previous year, it’s now time to take stock of where you financially stand.  It’s hard to set goals, when you’re not sure of your starting off point.  Maybe you have more money in your savings account than you thought, your credit score is lower than you expected, or you owe more on your new credit card with the added interest.  Knowing what you’re working with will help you set more realistic goals.  Here are a few things to look into:

  • Pull your free credit report. This will give you your credit score as well as reveal the debts you have.  Take the time to check to make sure everything is accurate and take note of your score.  If you there are inaccuracies, you want to get those taken care of as they impact your score.
  • Look at all financial statements (savings, retirement, etc.). Understand how much is in each account and see if it matches up with what you were expecting.
  • Identify any debts (car, student loan, mortgage, student loans). Does the remaining balance of each of these match what you thought?

Once you review these things, you can get started on your journey with a clear commitment, visualization, and starting off point for saving money, increasing your credit score, or getting out of debt.

Set SMART Financial Goals

It’s one thing to set a goal, but another to set a SMART goal.  As I mentioned earlier, I can get into the habit of setting goals that are not realistic which makes them even harder to accomplish.  By taking the time to ensure that your goals meet this criteria, you will be providing a much clearer picture of what it might take to accomplish them.

  • S: Specific. What exactly are you looking to achieve? State what your overall goal is while providing a dollar amount and a time frame. “Pay off $3,500 in student loans by the end of 2020
  • M: Measurable. How are you going to measure this goal? Without a measurement you won’t know if you achieved it. “Increase credit score by 50 points by March 2020”
  • A: Attainable. Can you actually achieve this? This is where reflecting over the past year is helpful to get a gauge of your financial landscape. “Save $6,500 for a life change (retirement, kids) in the next 12 months.”
  • R: Relevant. Is this goal important and relevant in your life right now? Things change over the years and months and something that might have been important to you in the past is not right now. Make sure the goal is significant now. “Save $5,000 for a big investment (car, house, etc.) in the next 12 months”
  • T: Timely. When do you want to achieve this goal? Even if you put a measurement, you need to give yourself a deadline. When is this goal due? “Put $1,200 towards my credit card debt by June 2020

Break Down Goals

Although now is a great time to set goals for the new year, creating goals that have a 12-month life can seem like forever. If your goal is to save $5,000 by the end of 2020, breaking that into a monthly goal of $416.67 can be helpful to see your progress along the way.  It also helps it feel a little less overwhelming!

Create a Plan to Accomplish Your Goal

Now that you’ve created your SMART goals and broken them down into bite size pieces that make them more manageable.  It’s time to make a plan to achieve your goals.  Like other goals, financial goals may require lifestyle changes.  If you’re looking to save money for a big investment or put money towards your student loans, that may involve cutting back in certain areas of your life.  In this post, I break down specific ways to Konmari your finances to cut back and help you move forward.

Acknowledge Even the Small Wins

If you’re saving that $416.67 a month, celebrate it!  Don’t let a month go by where you don’t acknowledge how far you’ve come.  This doesn’t mean celebrate by spending more money but finding ways to recognize your hard work. Maybe you:

  • Have a graph that you color in to show how much you’ve saved
  • Invite friends over for a game night
  • Help someone else meet their financial goals

Conduct Goal Check-Ins

Maybe a goal you write down now, makes sense but in three months from now you realize it’s not realistic.  It’s OK to re-evaluate the plan.  Identify what is working, what isn’t and what adjustments can be made to get you closer to your goal.  I find that setting 90-day goals or check in points gives you enough time to make progress and to evaluate if this is doable in the long run.

For example, if you’re looking to increase your credit score and finding yourself making little progress you might need to adjust your plan. According to a post of Lexington Law’s blog, credit utilization accounts for 30% of your credit score.  So, if your cards have a high balance and you haven’t been paying them down and were focusing on other areas, maybe you shift your focus and start paying down this debt.

Get support

Whether your goal is to increase your credit score, remove inaccuracies from your credit report, or save money to start paying off debt it’s not easy to go at it alone.  It’s important to get support to make sure you understand where you are and where you want to go.  The professionals at Lexington Law are here to help and can provide you with personalized assistance to repair your credit.  Their blog also provides a wealth of information to help you take more control of your financial future.


Alissa Carpenter