Crafting smarter money goals in 2021 – ABC News
- January 25, 2021
- By: Greenpath Financial Wellness
News article from ABC News suggests how to develop smarter money goals, with insight from GreenPath CEO Kristen Holt.
These uncharted times of the pandemic make it a challenge to stick to financial goals. Some research shows that 29% of Americans with financial goals for 2020 said COVID-19 forced them to put some of those aspirations on hold until 2021.
Although the pandemic is still part of our daily lives, the new year offers an opportunity to craft fresh money goals — and perhaps the trials of last year can help you clarify your financial ambitions.
DEALING WITH DEBT?
If you are having trouble paying off your credit card debt and/or other debt, debt counseling can help. GreenPath offers free counseling to help ease your financial stress, address your financial concerns, and develop a plan for living a financially healthy life.
Know your Priorities
Before you set your goals, think about your current financial situation and your priorities for the new year.
Consider personal priorities and values — and how they may have shifted as a result of the pandemic — to pinpoint what you want from your finances. Maybe you want to get back to a baseline of where you were in early 2020, before a year of financial challenges. Or maybe you want to use the money you saved while staying at home to put a down payment on a house.
“Start with an understanding of the why behind your goal,” says Kristen Holt, CEO of the nonprofit credit counseling agency GreenPath Financial Wellness. “A great goal is ‘I want to get out of debt,’ but go deeper and ask why. Will you be able to sleep better? Will you be able to enjoy life more? Get clear on your why, because that can be motivation to stick to your goal.”
With the foundation of priorities, it’s time to establish the framework to build your financial future.
The SMART template for goal-setting can help:
— SPECIFIC: Make your goals as specific as possible. If you want to curb your spending, for example, pin down how much you spend on unnecessary items each month. Then set an exact dollar limit for such spending.
— MEASURABLE: Choose a way to track your progress. If you want to save a certain dollar amount, consider visualizing your goal in a savings progress chart that you’ll color in as you go.
— ATTAINABLE: Your goals need to be something you can accomplish within a year. For instance, set a realistic percentage of your paycheck to set aside each month.
— RELEVANT: Choose goals that are meaningful to your personal values. If you want to retire early, think about upping contributions to a retirement account so you’re on track to accomplish that multi-year goal.
— TIME-LIMITED: Setting a deadline can keep the pressure on. Hitting monthly goals can provide a steady feed of accomplishments, which can keep you motivated.
Tactics to Try
The article shares a few simple tips to build momentum:
— AUTOMATE: Taking a “set it and forget it” approach can make accomplishing your ambitions easier. For savings goals, try direct depositing a portion of your income into a high-yield savings account. And for debt payoff, set up automatic payments for an amount above the minimum due to ensure you’re making progress.
— GET A HANDLE ON DEBT: If less of your payment goes to interest, more of it goes to debt payoff. You may be able to reduce your rate by refinancing your mortgage, student loan or car loan. If you have credit card debt, or other debt issues, explore what a debt management plan can do for you.
Financial counseling is also an option.
We Are Here To Support You
Understanding your options when it comes to financial goals starts with a conversation. Our financial counselors are available to talk. They can help you figure out a plan to manage through a crisis and will walk through your whole financial picture to help you identify options that can relieve stress and make it easier to bounce back.