A Guide to Setting Financial Goals for 2025

A new year means new opportunities. For many, this includes setting new financial resolutions. Whether it’s paying back debt, putting a down payment on a new home, or financing a trip around Europe, it’s important to set some goals and start thinking about what it’ll take to meet them. This quick guide will show you how to make a financial plan and stick to it so you can start the new year strong.

Understand Your Current Financial Situation

Your first step should be to take a step back and look at your current finances. Evaluate your income and expenses, including fixed ones like rent or utilities or flexible ones like groceries and clothing. Now would be a good time to put a spending cap on frivolous expenses and prioritize other expenses. You can use budgeting tools that show your habits over time and visualize where your money is going.

Taking some time to evaluate your current assets and liabilities will help you determine what goals are achievable. When you reach the planning stage, you will understand what needs fixing before moving forward.

Define Your Goals

So, what goals should you set? It depends on your goals and whether you're considering the short or long-term. Of course, your goals are shaped by personal values, but how can you decide what makes sense? One way is to think about SMART goals— Specific, Measurable, Achievable, Relevant, and Time-bound.

These criteria help you determine clear, doable goals. SMART goals can mean different things to different people, but they can help answer questions or concerns about your financial resolutions. Let’s expand on each point and what they mean for your goals:

1. Specific: What do you want to accomplish?
2. Measurable: How much will it cost?
3. Achievable: How can you meet this goal?
4. Realistic: Is it worth the effort?
5. Time-bound: When will you meet this goal?

If you can answer these questions, you’re on your way to creating a solid financial plan with fair goals.

Create a Financial Plan

Now that you understand your current finances and overall goals, it’s time to fill out your plan. Compile a worksheet of your SMART goals that includes the goal, costs, and answers to each question the SMART criteria ask.

Your budget is a big part of this. It may help to have a different worksheet with your income and expenses. Review your budget regularly to allocate resources and keep your goals on track. And within your budget, if possible, work toward an emergency fund you can fall back on if something unexpected happens.

Be Strategic

As part of your financial plan, it’s important to be strategic and practice savvy money habits. Managing debt and keeping your credit score in check are crucial factors. A good credit score opens up more options to balance your budget, like cheaper car insurance rates or higher credit card limits.

Also, look for opportunities to earn additional income to support your goals. Start a side hustle, sell some old stuff, or look for wise investments.

Cyprus Credit Union’s Dream Certificates are a perfect way to save for any financial goal. You can open a new certificate with as little as $20. Get the high rates of traditional certificates and keep earning dividends at that same rate as you keep depositing. Learn more about our Dream Certificates here.

To a New Year of Progress

A solid financial plan involves many moving parts. But life happens— and you should adapt to important changes and market conditions. Regularly review your goals and budget to stay ahead of the curve.

It may take discipline and hard work to make a financial plan and follow through with it. Establishing a routine, maintaining motivation, and staying flexible can help you achieve your goals.