How to set your 2024 financial goals, and tips to achieve them

From kitchen-table talks to news headlines, there are widespread conversations about the rising cost of groceries, rentals and mortgages.

While Australian Bureau of Statistics’ (ABS) latest data indicates that inflation has fallen to the lowest level since January 2022, the costs of housing, food, and insurance continue to rise. Navigating the challenges and complexities of the current economic scenario can be overwhelming and make us feel hopeless.

Setting financial goals, even if only modest, can help us to prioritise, make better decisions, and regain a sense of control.

When we refer to “financial goals”, we mean identifying what you need and want for your future.

Financial goals can include many areas, such as investments, home ownership, emergency funds, and saving for your retirement. A specific example could be saving six months’ worth of living expenses in an emergency fund.

As most of us can relate to with our new year’s resolutions, simply setting ourselves a goal is rarely enough for us to actually achieve it. In this article, we’ll explore some approaches you can take to developing strategies that support you to achieve your financial goals.

Why do we fall short on long-term financial goals?

Sometimes people may find themselves unable to act in a way that aligns with what’s better for their future selves. This is because the immediate “fix” or reward is more attractive than the potential reward that comes much later. Also, we tend to be optimistic about how our future will look.

We can act in ways that are more beneficial for our future selves by drawing on strategies to manage our immediate temptations or habits.

These “self-control strategies” can include how we act or what we think when faced with a tempting situation. It can help us to resist immediate satisfaction, and act in ways that align with our long-term goals.

For example, a common strategy people use in order to spend less money during the holiday season is to set budgets, like a total-spending Christmas budget or a budget for each month.

Putting the ‘self’ in self-control strategies

Adopting strategies that are promoted by other people, like a financial influencer, can make it easier for you to find a way to try and manage your temptations. However, if you want to increase your chances of actually achieving your long-term goals, creating your own, personal strategies is likely to be more effective.

Personalised strategies align more closely with our values and lifestyle compared with strategies provided by others, and this better fit is linked with a greater likelihood of achieving our long-term financial goals.

For example, a personalised budgeting strategy that considers income, spending habits, and priorities concerning how to manage money are likely to be more effective than a generic budget worksheet, increasing the chances of successfully accomplishing long-term goals.

Here are some things to account for when developing your personalised strategy to achieve your goal.

Self-evaluation

• Dedicate time to reflect on what’s important to you, examining your spending habits, lifestyle choices, and financial priorities. This reflection should take a broader perspective into account, considering how the financial environment impacts your financial priorities.
• If your values and motivations are unclear, consider discussing them with a trusted person who knows you well, such as your partner or a family member.

Identifying triggers

• Identify situations or emotions that make it hard for you to stick with your long-term goals. It’s important to understand these triggers are unique to individuals. In other words, what might prompt you to overspend might not be a trigger for someone else. If you’re interested, find out more about the diverse influences on our behaviour.

Developing tailored approaches

• Reflect on what previous self-control strategies have helped you achieve similar goals. If these strategies were effective in the past, consider what made them effective. Was it because they were aligned with your core values?
• If the self-control strategies used in the past weren’t effective, consider how you can improve and adapt them to your situation and values. How can you make them unique to you?
• In considering strategies, be kind to yourself. It’s important to keep your approaches realistic to increase your motivation and your likelihood of success.
• Use the insights gathered from the previous steps to understand and experiment with strategies that resonate with “who you are”, including what works better for you, to achieve your financial goals.

Balancing ease and impact in strategy development

As you can imagine, how personalised a self-control strategy is sits somewhere along a continuum, ranging from “less” to “more” aligned with one’s own values, motivations, and needs. Adopting a strategy that works for someone else, without reflecting on how well it fits you, is likely to result in a strategy that’s less personalised.

On the other hand, investing time to reflect on your spending habits and what’s important to you, and ways you could overcome specific challenges that come up when you try to achieve your financial goals, is likely to result in a customised strategy that better “fits” you (more personalised).

Nonetheless, the flip side of creating highly personalised self-control strategies is that they can require some time and effort as you explore what will truly “fit” you.

If you don’t have time to develop a personalised strategy from scratch, and choose to use one that’s worked for someone else, we recommend at least reflecting on how the strategy could be customised to suit you. Customising a strategy that works for someone else to align with your values, motivations, and needs could increase your chance of success.

Some key takeaways are:

• If you have time, examining how your values, motivations, and needs could be harnessed in a personalised strategy is expected to be more effective, because this will better meet your needs.
• If you don’t have time to develop a personalised strategy from scratch, and choose to use one that has worked for someone else, we recommend reflecting on how the strategy could be customised to align with your values, motivations, and needs.
• If you need help with understanding your financial needs and goals, along with creating a personalised plan, consider reaching out to a financial advisor. You can find more information here.
• If you’re experiencing financial hardship, and your goals involve effectively managing your debts, consider reaching out to a financial counsellor. Additional information on this can be found here.
• If your goals involve better-preparing for retirement, consider contacting your super fund. Most super funds offer financial advice to their members.