Business
How to set your financial goals for 2024
Setting financial goals for the year is a proactive step toward achieving financial success and security.
he beginning of the year is the best time to set your financial goals for 2024 by reflecting on your financial state. Whether you are aiming to build an emergency fund, pay off debt, or invest for the future, establishing clear financial objectives is crucial to achieving long-term stability and success.
Stian De Witt, executive head of financial planning at NMG Benefits, says by reflecting on the past, defining priorities and employing the SMART (specific, measurable, achievable, relevant and time-bound) criteria, you can create a roadmap to guide your financial journey.
“Remember, the key is consistency, discipline and a willingness to adapt as you work towards your financial aspirations.”
De Witt created this comprehensive guide to help consumers set up a path to financial success:
Reflect on the past year
Before you embark on setting new financial goals, De Witt says it is a good idea to take a moment to reflect on last year and analyse your financial successes and challenges.
Did you manage to stick to your budget, reduce unnecessary expenses, or increase your savings?
Understanding your past financial behaviour can provide valuable insights for crafting realistic and achievable goals, De Witt says.
Define your financial priorities
Consider your financial priorities and aspirations when you define your financial priorities. Are you focused on building an emergency fund, paying off high-interest debt, saving for a major purchase, or investing for long-term goals like retirement?
De Witt says clearly defining your priorities will help you to allocate your resources and efforts effectively. “It is essential to establish short-term as well as long-term goals, ensuring a balanced approach to your financial planning.”
Set your financial goals
Use the SMART criteria to provide a framework for setting goals that are clear, tangible and attainable.
Break down your financial objectives into specific actions with measurable outcomes. De Witt says instead of a vague goal like “save more money,” for example, set a specific target such as “save R500 per month for an emergency fund.”
“Making your goals achievable and time-bound adds accountability, making it easier to track your progress and celebrate your successes along the way.”
Pay off your debt
If you have outstanding debt, prioritise creating a plan for repayment. Start by listing all your debts, including credit cards, loans and other obligations.
Determine the interest rates and outstanding balances for each, De Witt says and devise a strategy to pay off high-interest debts first, allocating additional funds to accelerate the repayment process.
“Commitment is key to making regular payments and avoid accumulating further debt.”
Regularly review and adjust your financial goals
Financial goals are not set in stone, he says. Your circumstances may change throughout the year and therefore you should regularly review your progress and adjust your goals and strategies as and when you need to.
“Celebrate achievements no matter how small and use setbacks as opportunities to learn and improve. Being flexible in your approach will help you to stay on track and adapt to evolving financial situations.”
