Give this ‘Smart’ approach a try to get savings goals back on the right track

We are three months into 2021. Let’s check on those financial new year’s resolutions (remember those?). Quite possibly, they have already gone awry.

Maybe you planned to build a $1,000 emergency fund, but the balance is still zero. Or perhaps you swore off takeaways, yet you are scraping the last bite of chow mein from a paper container as you read this.

Don’t beat yourself up. You need not give up on your goal because of a setback.

“There’s nothing magical about new year’s and you don’t have to wait until 2022 to try again,” says Amy Hubble, a certified financial planner and founder of Radix Financial in the US. Here is how to salvage your money resolution:

Figure out what went wrong

Step back and examine why you couldn’t stick to your resolution in the first place. For example, say your resolution was to save money. That didn’t address how much to save or how to save it. A more effective resolution might have been to put $100 from each pay cheque into a savings account.

Ms Hubble recommends using the “Smart” goals framework to set resolutions. That stands for specific, measurable, achievable, relevant and timely, she says. Was your goal missing any of these elements? If so, there is a good chance you can salvage it by restarting with this approach.

But sometimes resolutions are beyond rescuing. If your financial situation has changed since you set it – say you lost your job or faced a major home repair – it’s perfectly acceptable to tweak it or walk away.

“Financial planning is a process, not an event,” says Trent Porter, a certified financial planner, life coach and founder of Priority Financial Partners in the US. “Life’s going to change, and your goals and how you get there are going to need to adapt.”

Know your reason

Ready to give your resolution another go? Ask yourself why you chose this goal and what exactly you hope to accomplish. “Maybe it’s less stress on your marriage or partnership, maybe it’s the ability to go on vacation once the world opens up again, and maybe it’s the ability to retire one year earlier,” Ms Hubble says.

Having a personal reason in mind can inspire you to see it through.

Take smaller steps

If you know your “why” but struggle with how to work towards the resolution, try making “little plans within the big plan”, Ms Hubble says. Think about what you can do on a daily, weekly or monthly basis.

For instance, if your financial resolution is to pay off $10,000 in credit card debt, calculate how much you need to pay each month to meet that goal, Ms Hubble says. Then focus on that smaller chunk.

Seek a partner

Find someone to discuss your resolution with. A spouse, roommate, friend or co-worker can shepherd and encourage you. Consulting a partner you share finances with is especially important.

Turning to an expert, such as a financial planner, is also an option. If you have a complicated situation, they can help you craft a customised plan.

Automate your resolution

Automating the work allows you to make strides even if you lose momentum. You can set up recurring bill payments, transfer money between bank accounts or track spending with an app, for example.

If you need to pay $200 towards a credit card bill every month, have that payment automatically taken out on pay day before you have a chance to overspend, Ms Hubble says.

Check your status

Do not get too comfortable. Schedule quick check-ins with yourself or your supporter to monitor your progress. Once a month should suffice.

Success will not happen overnight. You have a little over eight months left this year to hit your resolution goal. Leave the rough start behind and put your new plan in motion.