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Give Your Financial Goals a Midyear Checkup

June 10, 2016
Managing Money, Paying Off Debt, Personal Finance
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By Sam Farrington

Learn more about Sam on NerdWallet’s Ask An Advisor

How are your New Year’s financial resolutions coming along? If they aren’t going as well as you’d like, don’t despair. We’re almost halfway through the year, so it’s as good a time as any to get on track.

The key is taking small steps toward your goals every day. As author and motivational speaker Jim Rohn is quoted as saying, “Success is nothing more than a few simple disciplines, practiced every day; while failure is simply a few errors in judgment, repeated every day.”

So will you choose failure or success for the remaining half of the year? For those who want to take a step in the right direction, here are four ways to get your financial goals back on track.

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1. Keep your list short and narrow

It would be great if you could write that book you’ve always dreamed of, make all of those extra sales calls, eat dinner with the kids every night, work out first thing in the morning, earn an extra $50,000 this year, get that promotion, start that new business, have a regular date night with your spouse, and still have time to relax on the weekends. But the truth is, it’s difficult to accomplish all of the things you want to.

In fact, it’s challenging to focus on more than a handful of significant goals at once. I recommend setting three main “banner” goals to prioritize where you spend your time and energy.

For example, let’s say you want to get out of debt, but you have student loans, credit cards and a car payment. If you have an extra $1,000 each month to pay toward your debt, you could pay some of it toward each one. But many people will get discouraged quickly because it may appear that they’re making minimal progress when they spread the money around.

If you’re one of them, instead of making the goal “pay off debt,” you could focus on just one of your debts and attack it with the entire $1,000 a month. Whether you choose the debt with the lowest balance or the one with the highest interest rate is up to you. The power of keeping your list short and focusing your energy (and your cash) on one debt can make you feel as if you’re paying it off faster — and that can help you stay committed to your goal.

2. Do what works best for you

Some people like to ease their way into the swimming pool by using the stairs in the shallow end, while others like to jump right in. Similarly, there’s no “right” way to regain control of your finances.

But you should know your tendencies. If you’re likely to stick with your plan by easing into it, then by all means tiptoe your way back on track. If you’re more likely to stay committed to your plan by going all in, then go all in.

Imagine that you want to pay off $10,000 in credit card debt this year. Some people will be more likely to maintain a debt-reduction plan by gradually making small changes over a few months. This week they begin by eating out less frequently. Next week, they take the kids to a free park instead of the movies or an amusement park. They prefer to slowly gain traction and not have a dramatic impact on their lifestyle. If choosing only one thing to cut out each week will help ease the pain and help you keep paying off debt, then do that.

Others will want to get out of debt as quickly as possible. They may prefer to cut all unnecessary dining out of their budget starting today, to make this year’s vacation a staycation, and to pick up a part-time job a few nights a week. If you want to pay off debt as quickly as possible, this approach may motivate you to stick to your plan.

3. Track your progress

This is the hardest part to do consistently and where many people fail. We have no problem thinking up goals and dreams, and we might even be motivated enough to write them down. But that’s often the end of our goal-achieving process.

It’s important to hold yourself accountable by tracking progress toward your banner goals. Find a tracking system for your daily or weekly to-do’s that works for you. It could be a goal-tracking app, an Excel spreadsheet or a notebook.

For some people, a visual tracking tool may help. Remember those thermometers that measure progress on fundraising goals? You put your goal at the top of the thermometer, and each week you color in a portion of the bottom of the thermometer as you incrementally raise more money.

You can do the same for your own goal, whether you want to save up a certain amount of money or pay down a chunk of your debt. Although it might sound cheesy to do as an adult, making a debt or savings thermometer can be highly motivating. You can stick it on your fridge as a daily reminder of your goal and as a way to track your progress.

4. Pick yourself up, dust yourself off

If you’ve fallen behind on your goals or resolutions, forget about the past and move forward. Every little step you take in the direction of your goals gets you closer to where you want to be — even if you took a brief detour.

For instance, perhaps you decided to improve your finances by sticking to a spending plan, but then summer hits. You want to enjoy the sun, sit on the beach and live the good life. But when you look at your finances after the fact, you realize you’ve deviated from the plan. The strawberry daiquiris, hotels, posh dinners and plane tickets really add up.

This is the moment of truth. Do you continue living a life you can’t afford or do you get back to your budget plan and continue doing what it takes to achieve the financial goals you’ve set for your family? Don’t waste time worrying about your mistakes. Instead, address your spending issues today so you can start making progress toward your goal.

Reboot your plan today

You don’t need an arbitrary date like New Year’s Day to draw the proverbial line in the sand and move in the direction you desire. Today is just as good as Jan. 1. So what are you waiting for? Get back on the right path by taking small steps toward your goals today.

Sam Farrington is a fee-only financial planner and founder of Sound Mind Financial Planning in Omaha, Nebraska.