How to Set Financial Goals That Actually Stick: A SMART Approach for the New Year

One of my favorite January traditions is sitting down with a cup of coffee and diving into my annual goal-setting process. It’s my chance to reflect on the wins and lessons of the past year, reset my priorities, and map out what’s next. Honestly, this simple habit has been one of the biggest drivers of my success.

The start of a new year is the perfect opportunity to do the same—especially when it comes to your finances. Whether it’s saving more, tackling debt, or finally getting serious about your investment strategy, financial resolutions are always at the top of the list.

But here’s the thing: most resolutions don’t stick. In fact, only about 10% of people actually feel successful with their goals. Why? From my experience, it’s because their goals are too vague or lack a solid plan. This year, let’s change that. Let’s focus on SMART goals—Specific, Measurable, Achievable, Relevant, and Timely—and turn your financial resolutions into real results.

Why SMART Goals Matter

SMART goals transform your resolutions from vague ideas into actionable steps. For example, instead of saying, “I want to save more money,” you might say, “I will save $5,000 for a vacation by December 31 by setting aside $400 a month.”

Here’s how SMART goals work:

• Specific: Clearly define what you want to achieve. Vague goals often lead to procrastination or confusion.
• Measurable: Track your progress, whether it’s through a savings tracker, a budgeting app, or regular check-ins.
• Achievable: Set goals that are challenging but realistic. Reaching for the stars is great, but landing on the moon first is often the wiser path.
• Relevant: Your goals should align with your priorities. If paying off debt or saving for a home is what matters most to you, focus there.
• Timely: A deadline gives your goal urgency. Without one, it’s easy to keep saying, “I’ll start tomorrow.”

Set a Foundation with a Budget

Every successful financial plan starts with a solid budget. If you don’t already have one, now is the time to build it.

A simple approach is the 50/30/20 rule:

• 50% of your income goes toward essentials like housing, utilities, and groceries.
• 30% is for discretionary spending, such as entertainment and hobbies.
• 20% is allocated to savings and debt repayment.

This framework is flexible, so feel free to tweak it based on your financial goals. For instance, if you’re focused on paying off debt, you might allocate 25% or 30% to that category for a period of time.

Tackle Debt Strategically

If reducing debt is one of your resolutions, start by choosing a strategy that works for you. Two popular approaches are the snowball method and the avalanche method:

• Snowball Method: Pay off the smallest debt first to build momentum. Once it’s gone, roll that payment into the next smallest debt, and so on.
• Avalanche Method: Focus on paying off the debt with the highest interest rate first. This saves you the most money in the long run.

Both methods are effective, so pick the one that keeps you motivated.

Build Your Emergency Fund

An emergency fund is a financial safety net that protects you from unexpected expenses like medical bills or car repairs. Aim to save 3–6 months of living expenses in an easily accessible account.

Not sure where to start? Break it into smaller goals, such as saving $1,000 within three months, then building from there.

Monitor Your Credit Regularly

Your credit score and report are key components of your financial health. Commit to checking your credit report at least three times a year. You can access your reports for free through sites like AnnualCreditReport.com.

This habit can help you spot errors, prevent identity theft, and keep track of your financial progress.

Don’t Forget Your Health

Physical, mental, and financial health are all interconnected. Stress about money can take a toll on your well-being, so make it a priority to maintain balance in all areas of your life.

Regular exercise, quality sleep, and staying on top of your finances can reduce stress and boost your overall happiness.

Explore Investment Opportunities

Investing can help you build long-term wealth and reach your financial goals faster. Diversification is key—spread your investments across stocks, bonds, real estate, and other opportunities to reduce risk.

If you’re new to investing, it’s time to think about building a solid foundation. A financial advisor can help you create a strategy tailored to your goals and risk tolerance. I dive into how to get started in this video.

Plan for Retirement

Whether retirement feels far off or just around the corner, planning is always a smart move. Maximizing your employer-sponsored plans like 401(k)s and capturing any available match (hello, free money!) can make a big difference. I break it all down in this video.

If you’re self-employed, look into options like SEP IRAs or solo 401(k)s to save for your future.

Teach Your Kids Financial Basics

One of the greatest gifts you can give your children is financial knowledge. Talk to them about saving, budgeting, and the difference between needs and wants.

Simple steps, like giving them an allowance and encouraging them to save for something they want, can teach valuable lessons that stick for life. Want more tips on how to teach your kids important financial topics? Check out this video I made to learn more.

Make Giving Part of Your Plan

Giving to charity isn’t just about helping others—it can also bring a sense of purpose and joy to your life. Donations can be monetary, but they can also include items like clothing, furniture, or even your time.

Choose causes that resonate with you and involve your family in the process to make it even more meaningful. Check this video, out for tax tips for your charitable giving.

The Key to Success: Progress Over Perfection

Remember, achieving your financial resolutions doesn’t happen overnight. Set realistic goals, track your progress, and celebrate small wins along the way. This year, make it your mission to build not just wealth, but financial confidence and security.

If you’re ready to take your resolutions to the next level, let’s connect. Together, we can create a personalized plan that helps you achieve everything you set out to do this year. Cheers to a prosperous new year!

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James. Every investor's situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including a long-term holding period, diversification, and asset allocation. 401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty. Matching contributions from your employer may be subject to a vesting schedule. Please consult with your financial advisor for more information.