3 Simple Ways to Set Healthy Financial Goals in 2022
This is how to set financial intentions so you can reach your goals in a healthy way.
Over the last two years, many of us (myself included) have had a rough time emotionally and financially. Setting goals for the new year doesn’t feel as exciting as it used to because we’re still in survival mode, and there are still many unknowns. However, making plans, regardless of how much uncertainty you confront, is a helpful way to stay motivated. But, you also need to build in some flexibility. That’s why I’m setting intentions this year, instead of goals. By setting an intention, I can be both accountable to a financial target and compassionate with myself when things inevitably shift.
Every intention should be both financially savvy and emotionally satisfying, says Shannon Lee Simmons, the founder of the New School of Finance, an advice-only financial planning firm. “Not one or the other.” And whether you want to buy new clothes, treat yourself to a bucket-list vacation or save, you need to put healthy financial intentions into action. Here’s how.
Focus on conscious spending for financial wellness
Conscious spending refers to the practice of knowing or deciding exactly how and where you will spend your money based on your core beliefs and values. To identify them, ask yourself: What is the most important thing to me? Why? What brings me happiness and gives me purpose? Find the central theme and use it as a framework for all your spending decisions.
It’s important because you can buy things online within seconds, without even looking at the price, which can lead to a surprisingly big credit card bill. To counter this, Simmons believes one of the most important things you can do to feel more in control of your money is to remove your credit cards from shopping sites and apps on your phone. “Manually entering it every time is crucial because it allows your brain time to process what is happening,” she says. “Because you have to physically take out a credit card and punch in the digits, you’re more aware that you spent money.”
Ultimately, conscious spending is about making a decision that you’re going to feel proud of later on.
Not sure where to start? Pull up the last few transactions you made in 2021 and reflect on whether they match your values and priorities. This will help you set clear financial objectives for the new year.
Implement micro habits
Rather than focus on aggressive financial goals, like saving 15 percent of your salary for retirement or putting aside a year’s worth of costs in an emergency fund, try to start with small actions that will result in changes in your behaviour over time.
Also known as micro habits, these minor, manageable actions are so simple they can be completed in under two minutes. For example, set a waiting period between wanting something and buying it. “Put a 24-hour embargo on anything that you’re considering purchasing,” says Simmons.
You can also try the HALT technique: before you buy something, ask yourself, Am I spending because I’m hungry, angry, lonely or tired? When faced with a challenge, stress or any other emotional trigger, you may turn to spending for comfort—consciously or unconsciously.
Develop financial boundaries
Even amid the country’s worst public health crisis, money was cited as the top source of stress for over one-thirds of Canadians (38 percent)—more than personal health (26 percent) or employment (20 percent) or relationships (20 percent), according to the 2021 Financial Stress Index survey. That’s why it’s more important than ever to prioritize financial wellness. Creating boundaries is a vital first step.“Pre-COVID, people got stressed out about how much they were expected to spend,” says Simmons. “And I believe that one of the lessons we can take away from all of this is that you don’t have to say yes to everything.”
It’s easy to go overboard during the holidays, for example, so try setting spending limits with loved ones to avoid debt and overspending. Don’t forget to set appropriate boundaries for yourself, too, which will help you make room to say yes to things that truly bring you joy, she says.
Change is difficult. As a result, self-compassion is another crucial component of financial well-being. Using an intention-based approach to setting your goals for 2022, whether you achieve them or not, is a gentler, more empathetic way to make change or help an idea come to fruition. So, let’s move forward with intention. Whatever financial objective you have in mind, you can achieve it.