How To Set Financial Resolutions for 2022

New Year's resolutions, right? The ‘make it, break it’ loop somehow never seems to end. We say the trick to achieve the goals you set is to take the SMART approach with them.

Instead of setting vague resolutions like - "I’ll workout more" or ‘I’ll cut down on caffeine", being as SMART as possible with them will help you create useful resolutions that you can actually follow through on and improve your life.

1. S - Specific

2. M - Measurable

3. A - Attainable

4. R - Relevant

5. T - Time-bound

But the question is - how to make your existing New Year Resolutions SMART?

Say your New Year’s resolution is to get your finances in order, here is what you can do to make this generic resolution SMART.

Define the resolution in the most absolute terms:

Make the resolution-specific: For example, instead of saying you want to get your finances in order, say you want to pay off your debts and save a certain amount of money by the end of the year.

Keep your resolution measurable: Define the resolution in measurable terms, instead of saying you want to pay off your debts and save money, say - you want to pay off your debt of ₹1,00,000 (approx. ₹9000 every month) and save ₹40,000 every month by the end of the year.

Keeping your resolutions attainable helps: If your monthly income is ₹50,000, you cannot save ₹40,000 every month. What you can do is save about 10% of your income ie. Rs.5000 per month and have ₹60,000 by the end of the year.

The relevance of your goals to your long-term and short-term vision is important too: Make sure, paying off debt, saving a certain amount of money, and making certain investments right after are goals that are relevant to your year. If you are planning a new purchase, want to find some discipline in your financial situation, or are just planning for the future - this seems like a great way to go.

Setting a timeline to your goal makes it realistic and easy to achieve: In this case, you can make sure that you save ₹5000 every month, pay off ₹9000 (approx) every month and then use the remaining money to meet your daily needs.

You can use different budgeting apps or check out Florence Capital’s YouTube and Instagram for more tips on how to handle your finances in the easiest way possible.

New Year definitely brings in new energy and can oftentimes lead you to set way too many resolutions for yourself. Prioritize instead by making a list and picking 1 or 2 goals, and get, set go…

For more financial tips and assistance download the Florence Capital App today.