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2024 Vision: Setting Clear Financial Goals for the Coming Year Thumbnail

2024 Vision: Setting Clear Financial Goals for the Coming Year

Jonathan M. Gardey, MBA, CFA®, CFP®

President and Chief Executive Officer

For many families, 2024 is going to be a pivotal year. Following the post-COVID economic doldrums, families feel renewed optimism that they can finally go after what they want again. However, optimism is no substitute for having clearly defined, achievable goals, without which very little gets accomplished. But goals without a strategy to achieve them are no more than pipedreams. It’s easy to set a goal; making it happen is an entirely different thing.

You’re probably familiar with the theme: A person sets a goal and either fails to achieve it or becomes discouraged when he realizes it’s too complicated and then says, “It wasn’t a realistic goal anyway.” That’s typically the easy way out for people who didn’t think the goal through and didn’t have an actual strategy for achieving it. Often, they didn’t have the discipline to see it through because they didn’t have a realistic plan for achieving it.

The problem is not that the goal is unrealistic; it’s that there is no realistic plan for achieving it. When that happens, there is no emotional attachment to the goal, which renders it meaningless. It’s important to set achievable goals that are clearly defined and quantifiable. But you won’t know if it’s achievable until you develop a plan. For young families, the goals can be significant, such as buying a house, having more children, or funding college. But, if people perceive the goals as unachievable, they view them merely as hopeful aspirations that fail to inspire action or motivate sacrifices.

How to Set Achievable and Inspiring Goals

You’ve probably set many goals over your lifetime, but the only ones that matter are the ones you achieve. What was different about those goals that made you work to achieve them? The answer for many of them was “motivation.” Something about the goal inspired you and made it your focus.

For the bigger, more challenging goals, you’re not likely to muster the motivation needed to follow through unless you have an emotional attachment to them. If you can’t visualize the outcome and actually feel the satisfaction of achieving it, you’re less likely to maintain the motivation that keeps you moving forward.

Although it is not very difficult, there is an art and a science to setting achievable goals – a process that young families can use to determine just how realistic a goal is and then create a plan to achieve it.

Goal Setting Process for Families

  1. Make a list of the things you want and need for your family, dividing the list into “must haves” and “nice to haves.”
  1. Determine a time frame and relist them from the shortest to the most prolonged time frames. For goals with longer time frames, break them down into shorter milestones, making it easier to track your progress and determine if you are on track. 
  1. Rank your needs and wants based on their importance, with “1” being vitally essential and “10” not at all important. Your needs should have a higher ranking than your wants.
  1. Calculate the cost of your goals. You could do this by estimating the current cost and using an online future value calculator to calculate the future cost based on an average inflation rate (i.e., 3%).
  1. Determine how much it will take to save for each goal. You can use a free online calculator like the ones available at Bankrate.com to crunch the numbers. For example, if a goal will cost $25,000 in 15 years, you would need to save $159 a month based on an average annual return on your money of 5 percent. Do this for each of your goals.
  1. Determine your savings commitment. Develop a family budget to determine how much you can commit to savings each month. After squeezing every penny out of your budget that can be applied to savings, make that your savings commitment. If you can’t save the amount needed to meet your total savings goals, then you will need to find some more budget savings or focus on your top priorities. As your financial situation improves, you can increase your savings commitment and add more savings goals.
  1. Break your savings commitment into short- and long-term goals. For short-term goals, you will want to use vehicles like savings or money market accounts, and for long-term goals, you can use investment vehicles that can generate a higher return, such as stock and/or bond mutual funds or exchange-traded funds.

Finally, it’s essential to track your progress as a family. Get everyone involved so you can create some accountability. Review your goals and your savings progress to keep everyone motivated. If you’re not on track, ask family members for ideas about what budget items can be cut or how to increase savings to get you back on track. When you hit your milestones, gather as a family, and celebrate. 

Looking Forward to 2024: Setting Goals with Precision

As we embrace the potential of 2024, it's evident that setting well-defined financial goals is crucial for families. Success hinges not only on the ambition behind these goals but also on realistic planning and emotional investment. This approach involves essential steps such as prioritizing needs, choosing appropriate savings methods, and the critical role of family involvement in tracking and celebrating progress.

Embark on Your Financial Journey with Confidence 

Navigating the path to your family's financial goals can be intricate, yet it's a journey you don't have to undertake alone. At Gardey Financial Advisors, we're dedicated to guiding families like yours toward realizing their financial aspirations. Whether it's strategizing savings for major milestones or aligning your investments with future objectives, our expertise is at your disposal. If you're looking for a financial partner who is committed to exceptional service and long-term relationships, we're ready to assist. If you have a minimum of $500,000.00 in investable assets contact us today to start mapping out a clear and achievable financial plan for 2024 and beyond. Let's work together to turn your financial goals into reality. Schedule a consultation now.

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