New Year, New Financial Goals!
As we close out the holiday season, many of us look at the New Year as a fresh start and work on a list of resolutions and goals. Why not add some financial ones to that list?
As many of us know from personal experience, creating these goals are easy. Changing our habits and achieving these goals are often forgotten within weeks or months. Below are some tips to create your resolutions in 2023.
Tip # 1: Set SMART Goals
What is a SMART goal? A smart goal has all of the ingredients for success; they are – Specific, Measurable, Attainable, Realistic, Timely. Using the SMART method helps you clarify, focus, and increase your chances of achieving your goal.
“Saving more” is a common and popular goal. Resolving to save more may not be very effective if “more” still falls short of being “enough” or if you aren’t investing your retirement savings properly. With saving more in mind, a SMART goal would be to – save $50 per pay period for the year, increase retirement plan savings by 1%, open a 529 plan for my child and contribute $25 per week.
Tip # 2: Create Short Term Goals
Short term goals help us stay on track and work towards the long term goal. If you want to run a marathon, you don’t start by running all 26 miles on day one. You start with a few miles each week and build from there. Let’s say your goal is to save $10,000 for the year. Breaking it down quarterly or monthly makes it easier to stay motivated.
Tip #3 Accountability
The odds of success are much greater if you have someone to hold you accountable. Talk to your financial advisor about your long term and short term financial goals. Your financial planner has an understanding of your overall goals for the future and can help you create strategies to accomplish your 2023 financial resolution.
With these 3 tips in mind, let’s create some resolutions for 2023
Resolution #1: Create or review your spending plan.
We utilize the phrase spending plan rather than budget. Your plan should include how much income, after taxes, you bring home, your regular monthly expenses, savings for emergencies, college and other goals. Your plan should be to have zero income left at the end of the month and not negative. Review the plan to get a better understanding of where you are spending money and pinpoint ONE place that you could decrease spending to allow you to save more towards one of your goals. It does not have to be much, even $25 a month more put towards savings will help to achieve a goal.
Resolution #2: Get a financial physical in the New Year.
As we get older it is recommended that we get a check-up or physical from your doctor every year or two to help catch any potential health problems early. Consider doing this with your finances and your financial goals as well. A professional financial advisor can help make sure you are on the right track.
If you maintain your own finances and feel you don’t need a professional’s help, a financial review may just confirm that you are doing a good job, but it may also show you some areas you can improve.
Resolution #3: Take control of your finances by learning more about finances.
It is unfortunate that many of us do not learn more about personal finances in school, and money (in many cases) can be a difficult conversation to have with children. You may feel that as an adult you have had to learn through trial and error. Resolve in the New Year to read at least one book about personal finances to educate yourself about money, and if you have children, resolve to start the conversation with them about basic saving principles. It’s never too early to start their financial education.
VLP Financial Advisors
8391 Old Courthouse Road, Suite 203
Vienna, VA 22182
For more than 30 years, VLP Financial Advisors has worked successfully and effectively with all kinds of families and individuals, retirees and business owners, women and men — all pursuing their own aspirations, each investing and saving in the ways that make the most sense for them.
VLP specializes in investment management and financial planning for individuals, families and organizations, and 401(k) management for small businesses.
We are proud to carry the following designations:
- Certified Financial Planner (CFP®) Professionals
- Accredited Investment Fiduciary (AIF®)
- Certified Financial Analyst (CFA)
- Certified Divorce Financial Analyst (CDFA®)
Learn more at www.vlpfa.com
Securities and advisory services offered through Registered Representatives of Cetera Advisor Networks LLC, member FINRA/SIPC, a Broker-Dealer and Registered Investment Advisor. 8391 Old Courthouse Road Suite 203 Vienna, VA 22182.
Daniel P. Lash, CFP,® AIF®
Daniel P. Lash, CFP®, AIF® is a partner at VLP Financial Advisors and the 2016 President of the National Capital Area Chapter of the Financial Planning Association (FPA). He believes that strategic planning is the key to creating, protecting, and growing wealth.