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The new year is a time for wiping the slate clean and setting new goals. One of the best moves you can make is to focus on taking control of your finances. We’re not just talking about getting out of debt or paying off holiday spending debts. Sitting down to analyze your current financial situation and setting S.M.A.R.T. goals can help put you on the path to financial stability by the end of the year.

What are S.M.A.R.T. goals? Well, simply put, they are goals that are well thought out and attainable. Many new year’s resolutions fall flat after only a few months because people tend to take on goals that are unrealistic. You can cancel your new gym membership, but if your finances are “out of shape” you could end up in a worse position entering 2021.

S.M.A.R.T. Goals Are:

Specific- Instead of just saying “I’m going to pay off my credit card” say “I am going to pay an additional $100 per month towards my credit card.”

Measurable- Your goals should always be measurable. For example, you set a goal of saving $100 per month on groceries. You can measure this by adding up your previous grocery store purchases to calculate how much your maximum monthly budget is in order to come in $100 lower.

Attainable- Your goals should always be attainable. If you set goals that are way beyond your reach, you are only going to give up on them. Start small and branch out as you start to hit those targets along the way.

Relevant- Your goals should be relevant to the overall goal that you’d like to reach.

Time-Based- You need to have a time frame for reaching your goals. Keep in mind the “attainable” factor of S.M.A.R.T. goals. If you have a specific date in mind to reach your goal you can take the time you have remaining and come up with smaller, manageable steps along the way to hit your goal.

Now that you understand how to set goals in a way to make them more achievable, let’s look at some of the goals that can help you take control over your finances.

1. Set A Monthly Budget- We all know how much our expenses are and how much money they make, but few people actually sit down and write it out. You should have a budget that breaks down every expense you have and then deduct those from your income. This helps you know how much you may have left over for other things. How many times have you purchased something and then realized that you have barely enough money left to cover your bills? Knowing exactly how much discretionary income you have each month can prevent this.

2. Cut Out Unnecessary Expenses- Everyone has expenses that can’t be eliminated, but often there are many that can be. Do you really need four streaming service subscriptions? Do you need the ultimate car wash every week? Take a close look at your spending habits and your expenses to see where you may be able to cut back.

3. Reallocate Discretionary Income- Once you’ve done your budget and you know how much discretionary income you have every month, you can decide the most effective way to use it. Look at any debt you may have and see how much extra you can contribute each month. Maybe setting it aside for larger expenses that happen seasonally can make the biggest impact.

4. Start Saving- Let’s face it. Our budget isn’t always set in stone. Emergencies happen and unexpected expenses arise. Saving doesn’t have to be for things like vacations or holidays. Having some savings can help you stay on track with your financial goals if something comes up and you have additional expenses you didn’t account for.

5. Automate Your Finances- If possible,set up automatic deposits into your savings so you don’t have to worry about forgetting.Setting up auto-payments for your bills sometimes leads to rewards. Some companies offer discounts for auto pay.

6. Pull Your Credit Report- Most people don’t think to check their credit until they get denied for something. Federal legislation requires the three largest credit reporting bureaus to provide free reports to consumers once a year.

7. Gather, Organize, and Protect Financial Documents- Make sure that you have copies of important financial paperwork related to obligations and assets, income tax returns, 401K statements, etc. Decide on a safe (fire-proof) place to keep all documents to protect them, whether it be a safe or a lock box.

Everyone’s financial situation is different, so you need to set goals that make sense for you. Setting S.M.A.R.T. goals and following these 7 steps will help you get your finances under control. You will have everything you need to analyze your current financial situation and make a blueprint for ending 2020 in great financial shape.

Learn More

Citizens Savings Bank has multiple locations throughout Lackawanna, Wayne, and Monroe Counties. For branch locations and hours, visit our website. We also have a Customer Support Team ready to answer any questions you may have. Call us today at 1-800-692-6279 or email [email protected]. Member FDIC.