Millennial Money: Crafting smarter money goals in 2021

Sean Pyles

Setting money goals in 2020 was likely an exercise in futility. Maybe you'd been saving for a trip abroad, but the pandemic kept you at home. Or you wanted to save up for a down payment on a house, then the recession left you out of a job. 

A man sits at a picnic table in a park in Kansas City, Missouri, as the sun sets. [AP File Photo/Charlie Riedel]





"Take an inventory of where you are and more importantly who you are," says Jordan Awoye, an equitable advisor based in Long Island, New York. 



"Start with an understanding of the why behind your goal," says Kristen Holt, CEO of the nonprofit credit counseling agency GreenPath Financial Wellness. "A great goal is 'I want to get out of debt,' but go deeper and ask why. Will you be able to sleep better? Will you be able to enjoy life more? Get clear on your why, because that can be motivation to stick to your goal."


With the foundation of your priorities and motivation settled, it's time to establish the framework to build your financial future. That means crafting your goals in a way that makes them easier to achieve. The SMART template for goal-setting can help:


— MEASURABLE: Choose a way to track your progress. If you're paying down debt, think about using a debt tracker. Or if you want to save a certain dollar amount, consider visualizing your goal in a savings progress chart that you'll color in as you go.

— ATTAINABLE: Your goals need to be something you can accomplish within a year. If you're paying off $10,000 in credit card debt, for example, find what you can realistically pay monthly, multiply that by 12 and use that amount as your goal. 

— RELEVANT: Choose goals that are meaningful to your personal values. Similar to finding your "why," choosing relevant goals helps ensure that your 2021 financial plan is connected to your life goals. If you want to retire early, think about upping contributions to a retirement account so you're on track to accomplish that multi-year goal.

— TIME-LIMITED: Setting a deadline can keep the pressure on. And think about breaking up your overarching goal into smaller pieces that you'll achieve on a monthly basis. Hitting monthly goals can provide a steady feed of accomplishments, which can keep you motivated.

Take the SMART acronym a step further by tacking on an "R" for "reward." Plan rewards for yourself as you make progress. The more enjoyment you get out of the process, the more likely you are to keep working at it. 



Finally, here are a few simple tips to build momentum:

— AUTOMATE: Taking a "set it and forget it" approach can make accomplishing your ambitions easier. For savings goals, try direct depositing a portion of your income into a high-yield savings account. And for debt payoff, set up automatic payments for an amount above the minimum due to ensure you're making progress.

