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Setting unattainable goals might make you feel like a failure. And you deserve better. Read on to see if you’re about to fall into that trap.
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The start of a new year is a popular time to establish different financial goals and priorities. And recent research from The Ascent found that 67% of Americans were making financial resolutions for the new year.
Working toward different goals is a great way to better your financial picture and give yourself something to feel good about. But if you establish goals that are unrealistic, the opposite might happen — you could end up setting yourself up to fail and be miserable. With that in mind, here are a few signs that the financial resolutions you’ve landed on aren’t really attainable.
1. They require you to give up every single purchase you enjoy
Maybe you’re intent on growing your emergency fund from $0 to $6,000 this year. That’s a great goal in theory, as you’d be well-protected from unplanned expenses or job loss.
But saving $6,000 in a single year means banking $500 every single month. If you bring home $2,500 a month and your essential expenses amount to $2,000, that means to save $500 a month, you’d have to spend nothing on leisure or extras like streaming services or the occasional takeout meal.
It’s definitely possible to cut down on those things. And if you have no cash in a savings account, then that’s frankly an important thing to do.
But telling yourself you’ll spend $0 on fun purchases this year isn’t reasonable. Instead, you can consider a compromise — aim to save $250 a month, or $3,000 a year, which still leaves you with some cash to spend on the things you love. At the same time, it gives you a $3,000 cushion.
2. To pull them off, you’ll need to work constantly
Maybe you’re aiming to buy a home this year, but to come up with the down payment, you’ll need to boost your income with $20,000 in side hustle earnings. That $20,000 may be attainable — if you’re willing to work every waking hour. But who wants to live like that?
It’s not a bad thing to put in extra time if you can boost your income and improve your financial picture. But there’s a difference between working, say, 50 hours a week instead of 40 versus working 70 hours a week. The latter might have a negative effect on your physical and mental health.
3. They’re dependent on factors outside your control
Your goal may be to get a raise in 2024. But if you’ve worked for the same company for three years and know for a fact that raises are a rare occurrence at your place of employment, then your goal may not be a great one, because it’s something you can’t control.
Sure, you can work your hardest, boost your skills, and put in extra hours to impress your boss. But that still doesn’t guarantee that you’ll be the proud recipient of a pay boost.
Instead, focus on goals that are within your power to control. For example, if you buy lunch every day and spend $10 per meal, tell yourself you’ll cut back and save $100 a month. That’s something you have the ability to do.
The point of setting financial resolutions is to feel good about your finances and yourself. Setting unrealistic goals might have the opposite effect, so aim to establish goals that are attainable and not misery-inducing.
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