As the new year fast approaches, now couldn’t be a better time to start planning your big goals for the year ahead. As you contemplate the healthy habits you’ll kick into high gear or set your eyes on the job promotion you’d like to achieve, don’t forget to think through your financial goals, too.
Whether you want to make savings strides or increase your investment income, deciding your financial goals doesn’t have to be overwhelming or super time consuming. In fact, all you need is an hour (or less) to put your best financial foot forward in 2022 and start the New Year the smart way — not the hard way.
Step 1: Determine S.M.A.R.T. goals.
- Review current finances (budget, investment accounts, etc.): 15 min
- Define goals for next year: 10 min
The very first step to achieving a goal is also one of the most important: Clearly defining what your goal is. And one of the best methods for doing so is using the S.M.A.R.T. acronym: Specific, Measurable, Achievable, Relevant, and Time-bound. Basically, this way of framing means you set realistic goals that you can see yourself accomplishing in a predetermined timeframe and measure your progress against.
For example, if your goal is to build up emergency savings, think of it this way: My goal is to build an emergency fund of $2,000 dollars by Dec. 1, 2022. Or if you want to reduce your debt, identify a specific amount or percentage you want to lower it by and when.
Perhaps your goal is to spend less and invest more. If so, you might take a look at your budget to pinpoint how much you can reasonably reallocate to your investment account each week, month, or quarter.
If you aren’t sure where to begin when planning your goals, a good place to start is by deciding whether you want to focus on saving, paying down debt, or investing. Finding a balance between these three objectives will provide a foundation for your goals.
Another great resource for goal inspiration is this financial planning checklist, which can help you think through potential objectives throughout the year by breaking up your financials by week, month, and quarter.
And finally, if you plan to make some big purchases this year, like a house or a car, this purchase calendar can get you thinking strategically about when to save and when to buy so you can maximize your money.
Just remember, the more specific you can be when outlining your own goals (and you can always work toward more than one financial target), the easier it will be to build a plan to achieve them — which brings us to step two.
Step 2: Put a plan in place.
- Write goals down: 10 min
- Create a step-by-step plan for each goal: 15 min
With your eyes on the prize, it’s time to make an actionable plan to get there. First things first: Write your goal down. Physically writing down (or typing) your goals will keep your objective clear, give you a point of reference, and can serve as a simple motivational reminder when you need it. You know what they say: Seeing is believing. And keeping written record of your goals is a powerful tool that can help you visualize success and put you one step closer to achieving it.
Now you can create a plan, and how detailed you make it is up to you. But one simple place to start is by splitting your targets up by short, mid, and long-term goals to help you prioritize. For example, a short-term goal you want to achieve by summer may take priority over a long-term goal you’ll be working toward for the next few years. From there, you can think practically about what steps you need to take each week or each month to make progress.
If your intention is to save for a down payment on a home, for example, your plan may include cutting one expense from your budget each month and transferring that money to your home savings. Or if you want to increase your retirement nest egg, your plan could be to boost your 401(k) or IRA contribution by 1% every six months until you reach a certain percentage.
No matter what steps you map out, you’ll also want to think through how you will measure your progress. Committing yourself to regular check-ins, possibly monthly or quarterly, can keep you on track and help you stay accountable. For extra support, consider sharing your goals with a friend or family member. That way you have someone to share your accomplishments with or lean on if you need motivation — and if they are striving toward goals too, you can rely on each other for mutual accountability.
Step 3: Take advantage of tools.
- Turn on recurring transfers: 1 min
- Set up Surprise Savings: 2 min
- Organize savings with Buckets: 2 min
Constantly thinking about your finances can be stressful. But one smart (and easy) way to set yourself up for success and to reduce your stress levels is to use technology to your advantage — especially automation. Automating your savings, like turning on recurring transfers to your Ally Bank Online Savings Account (OSA), means you don’t have to remember to move money. You can set it and forget it, with the comfort of knowing you’re making progress.
Another way you can use the power of technology to boost your savings is with Ally Bank’s OSA surprise savings feature. This smart technology securely monitors your linked checking accounts to detect micro amounts of money (such as a few dollars here and there) that are safe to save. Then it automatically transfers the cash to your OSA — pushing you closer to all your goals. Ally Bank also offers other booster features such as round ups, which round up your spending in your Ally Bank Interest Checking account to the nearest dollar and then automatically transfers the money into your OSA once you’ve accrued at least $5.
If you have multiple savings goals or just want to organize your finances, our OSA buckets tool allows you to automatically divvy up your savings in up to 10 custom digital envelopes. Think: a bucket for student loan payments, one for the bike you’re saving for, another for your emergency fund, etc. You can easily distribute your dollars and see a snapshot of how your savings are growing in each bucket. Lastly, you can also use automation when it comes to investing by setting up automatic, regular transfers to your Ally Invest account. And if you want to take the automated approach further, you might consider a Robo Portfolio, which combines robo-advisor technology and human expertise to automatically manage and rebalance your portfolio for you.
Start checking off your list.
With S.M.A.R.T. goals written down, a realistic plan with actionable steps that you can take, and technology on your side, you’ll be more prepared than ever to achieve your financial ambitions — and without having to sacrifice much of your time. Just remember to periodically check in on your progress and celebrate the small wins while moving closer to your goals — and ultimately, the big achievements as you’re able to tick those targets off your to-do list.
Open an Ally Bank Online Savings Account and get one step closer to your goals.