As the new year approaches, many of us start reflecting on what we want to achieve in the months ahead. Some people find this overwhelming, but it doesn't have to be. Instead, think of it as creating a plan tailored to your budget and lifestyle. Whether you are tackling debt, saving for a major milestone or building your retirement fund, small, consistent steps can lead to big rewards. In this blog, we will guide you through setting achievable money goals to help you feel confident and on track with your finances by this time next year.

Start with Your Budget

Before setting any goals, take a hard look at your budget. Ask yourself:

  • How much money do I currently earn?
  • What are my essential living expenses?
  • Should I cut back on some of the spending?

There is no sense in setting a savings strategy around a dream income you don't have yet. Work with what you have. If you need more resources, consider a side hustle or exploring other income opportunities. Once you have accounted for your cash flow, you will have a clearer picture of what is achievable.

Tackle One Goal at a Time

Most people tend to lose motivation when trying to do too much at once. Focus on one priority at a time.

  • Short-term goals: Paying off a credit card or building an emergency fund.
  • Mid-term goals: Saving for a house deposit or creating an investment portfolio.
  • Long-term goals: Building a retirement plan or funding a child's university education.

For example, if you have credit card debt, tackle it first. Once you have paid it off, redirect the funds to a new goal, like retirement savings or premium bonds.

Use SMART Goals

A good rule for financial goal setting is to make them SMART: Specific, Measurable, Achievable, Relevant and Time-bound. Instead of saying, "I want to save money", try – "I will save £3,000 for an emergency fund by setting aside £250 a month for the next 12 months."

Breaking goals into clear steps makes them easier to achieve.

Automate Your Savings

Make saving a habit by setting up automatic transfers. For instance:

  • Allocate a portion of your income to a savings account every payday.
  • Create separate bank accounts for different goals, such as an emergency fund or a retirement plan.

By automating the process, you are less likely to spend money impulsively.

Prioritise Financial Security

Building financial security is key to achieving both short-term and long-term financial goals. Consider these examples:

  • Emergency fund: Aim for 3 to 6 months of essential living expenses.
  • Retirement savings: Regularly contribute to your retirement plan or investments to ensure a comfortable retirement.

These are the foundations of a stable financial future.

Invest Strategically

If you have enough money saved for emergencies and are meeting your monthly expenses, it is time to start investing.

  • Diversify your investment portfolio with stocks, bonds or premium bonds.
  • Keep a close eye on interest rates across different savings accounts and look for opportunities with good investment returns.
  • Investing is a long game. Although progress may be slow, it is a powerful long-term way to achieve your financial goals.

Stay Flexible and Review Your Goals

Life happens, and sometimes, goals need to be adjusted. Revisit your savings strategy every few months to ensure it still makes sense. Then, if a crisis arises, you might need to reprioritise and the regular reviews will mean that you are prepared for that.

Get Expert Advice

If you are unsure about how best to set your financial goals or manage your investments, speaking to a financial planner can help. They can provide tailored advice for building a retirement plan or creating a sustainable strategy for your other long-term goals.

Remember, Be Realistic

Setting your financial goals for 2025 doesn’t have to feel overwhelming. You can set yourself up for success by making a clear budget, focusing on one goal at a time and taking consistent steps towards it, no matter how small. Whether you are saving for a house deposit, planning to retire early or investing for your future, starting small and being consistent makes all the difference when it comes to reaching those goals.