It's Time to Revisit Your Annual Financial Goals. How Did You Do?

As the year wraps up, it's a good moment to reflect on your 2023 financial journey. Did you meet the goals you set at the start of the year? Encounter any surprising financial hurdles? Identify areas where you did well and others where improvement is needed?

This blog aims to help you review your annual financial goals, assess your performance in the past year, and establish meaningful goals for 2024.

How to Revisit Your Annual Financial Goals

Let’s go over some steps to take as you evaluate your 2023 financial goals.

Review Your Initial Goals
Begin by going back to the financial goals you outlined for yourself at the start of 2023. These objectives might involve clearing debt, funding a child or grandchild's education, saving for retirement, or reaching any other financial dreams you had in your plans.

Assess Your Progress
Next, assess the headway you made on each goal. Did you fully achieve them, make partial progress, or fall short? Be truthful in your evaluation, as this self-reflection will be the foundation for your financial considerations and goal-setting in the coming year.

Consider Unexpected Financial Events
Consider any unexpected financial events that may have occurred during the year. These could be positive, such as unexpected windfalls or promotions, or negative—for example, medical expenses or interest rate hikes on mortgages and car payments. These events can have a significant impact on your financial journey and should be factored into your assessment.

Analyze Your Budget
Examine your 2023 budget. Did you adhere to it? Pinpointing areas of overspending or underspending can empower you to make more informed decisions moving forward.

Judge Your Financial Performance

Now that we’ve gone over how to revisit what happened in 2023, let’s look at how to judge your financial performance.

Ask Yourself the Tough Questions
To effectively judge your financial performance over the past year, ask yourself these important questions:

• Did I increase my net worth this year?
• Did I reduce my debt, if applicable?
• Did I save and invest according to my financial plan?
• Did I achieve my short-term and long-term financial goals?
• Did I maintain an emergency fund?
• Did I contribute to my retirement accounts?
• Did I manage to stay within my budget and control my spending?
• Did I make progress toward achieving financial independence?

Quantify Your Achievements
Use measurable metrics to quantify your financial achievements. For instance, calculate your net worth, total debt reduction, savings rate, and investment returns. Having concrete numbers will give you a clear picture of how well you performed in 2023.

Reflect on Non-Monetary Achievements
Don’t forget to reflect on non-monetary achievements as well. Did you learn more about personal finance? Did you develop better financial habits? Did you make strides in improving your financial literacy? These non-monetary gains are crucial for long-term financial success.

Setting Goals for 2024

Lastly, let’s set goals for 2024 so you can kick the new year off right!

Identify Your Priorities
Begin by identifying your financial priorities for 2024. Are there any outstanding goals from 2023 that you want to roll over into the new year? Additionally, consider new objectives that may have emerged throughout the year.

Make SMART Goals
SMART goals are Specific, Measurable, Achievable, Relevant, and Timely.¹ Ensure that your goals for 2024 adhere to these criteria. For example, instead of saying “I want to save more,” you could say, ‘I will save $10,000 for a down payment on a house by December 31, 2024.”

Create a Detailed Plan
Develop a detailed plan for each of your financial goals. Break them down into smaller, actionable steps that you can track throughout the year. This will help you stay motivated.

Adjust Your Budget
If your financial goals for 2024 require adjustments to your budget, make those changes early on. Allocate resources strategically to ensure you’re on track to meet your objectives.

Monitor and Adapt
Consistently keep track of your progress throughout the year. Make necessary adjustments, and don't let setbacks discourage you. Financial journeys often have twists and turns, and flexibility is crucial for success.

Reflecting on your financial journey in 2023 and setting goals for 2024 is a valuable exercise in personal finance. It allows you to take control of your financial destiny, learn from past experiences, and make informed decisions for the future.