You started the year gung-ho on your money goals. You resolved to spend less, save more, pad that nest egg and finally build your emergency savings to six months. So now that we’re reaching mid year, how are those goals coming along? If you’re tempted to raise your hands in surrender and just hope for a clean slate next year, don’t give up yet! It’s not too late to get back on track.
Check out our tips on how to course-correct between now and December 31st — and how to gear up for an even better New Year.
Step 1: Figure Out How Off Track You Are
Before you can come up with a plan to get on track, you first need to know just how far off you are. So start taking stock of your financial data. For example, if your goal was to increase your net worth, then calculate your net worth by adding up all the money you have in your checking, savings, investment and retirement accounts and subtracting all your debts. If your goal was to eat out less, see how much you’ve been spending in that category. Perhaps by reviewing your credit card purchases and take-out app history or estimating how much you’ve been paying each week, if you tend to use cash. If your goal was to pay off loans or credit cards, check to see where your balances stand. The key is to get a handle on the numbers.
Step 2: Assess Why You Got Off Track
Maybe you didn’t have a specific action plan in place to reach your goal. People often come up with really broad goals like, ‘I want to save more money,’ but don’t have any idea how they’ll accomplish that. If you did come up with a plan, perhaps the issue was that it wasn’t sustainable for the long run. For instance, to cut down on eating costs, perhaps you resolved to start bringing lunch to work every day. The problem? We need to address what comes next in our plan. Without that next level of thinking, you might get so sick of packing the same salad every day that you end up binging on pricey lunches out for a week straight. The bottom line: If you know what your previous pain points were, you can try to work around them in your next plan of attack.
Step 3: Hit the Reset Button
Depending on how far off base you are, it may be worth it to simply revise your financial goals in a way that makes them more reasonable and achievable. If your New Year’s resolution was “I want to save more money,” you could refine it this way: “I want to save $200 for the next three months so that I’ll have $600 to put toward the holidays.” Maybe your original goal was to have $1,000 by year’s end, but the key here is the “A” — your goal needs to be attainable, otherwise you risk getting discouraged again. And there’s no need to wait until the New Year to get the ball rolling on a goal. If you want to go ahead and commit to saving $2,400 over the next 12 months, then do it.
Step 4: Set Weekly Milestones
Oftentimes, people get derailed because they don’t track their progress frequently enough. Indeed, in the Fidelity study, more than a third of those who didn’t achieve their financial goals last year said it was because they didn’t set milestones. So to help prevent those moments where you realize you didn’t hit your target until the end of the month — after it’s too late to do anything about it — start breaking down your goals by the week. Think about it: Most of us don’t say, “I’m going to the gym for 15 hours over 30 days,” It’s probably better to say, “I’m going to go to the gym three times a week.”
Step 5: Automate What You Can
We could all use a little extra help when it comes to inching toward a goal, so evaluate where you can automate things to make your financial life easier. For instance, you could set up automatic payments toward a credit card that you’re trying to pay off by the end of the year or even beef up your retirement fund through direct contributions that come out of your paycheck. The more you can make your goal progress a no-brainer, the better.
Step 6: Ask for Help
Sometimes it can be helpful to get a new pair of eyes on a problem to reach any kind of solution. Contact Member Services to see what options are available for you to reach your goals. We’ll listen to your story and do everything we can to help you get back on track.
Ultimately, the end game for goal resetting is to instill financial habits in yourself that will eventually become second nature — perhaps to the point where you may not even have to make them into special resolutions anymore. What you’re trying to do is have these habits in place by the New Year, rather than start over.