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Millennial Money: Crafting smarter money goals in 2021

Setting money goals in 2020 was likely an exercise in futility. Maybe you’d been saving for a trip abroad, but the pandemic kept you at home. Or you wanted to save up for a down payment on a house, then the recession left you out of a job.

The pandemic made achieving yearlong goals a challenge for many last year. In fact, 29% of Americans with financial goals for 2020 said COVID-19 forced them to put some of those aspirations on hold until 2021, according to a NerdWallet survey conducted online in late fall by The Harris Poll among over 1,700 U.S. adults with 2020 financial goals.

Although the pandemic is still part of our daily lives, the new year offers an opportunity to craft fresh money goals — and perhaps the trials of last year can help you clarify your financial ambitions.


Before you set your goals, think about your current financial situation and your priorities for the new year.

“Take an inventory of where you are and more importantly who you are,” says Jordan Awoye, an equitable advisor based in Long Island, New York.

First, dig into the state of your finances, including your income, monthly expenses and emergency fund. Understand where you are right now to get an idea of where you could be in a year’s time.

Then think about your personal priorities and values — and how they may have shifted as a result of the pandemic — to pinpoint what you want from your finances. Maybe you want to get back to a baseline of where you were in early 2020, before a year of financial challenges. Or maybe you want to use the money you saved while staying at home to put a down payment on a house.

“Start with an understanding of the why behind your goal,” says Kristen Holt, CEO of the nonprofit credit counseling agency GreenPath Financial Wellness. “A great goal is ‘I want to get out of debt,’ but go deeper and ask why. Will you be able to sleep better? Will you be able to enjoy life more? Get clear on your why, because that can be motivation to stick to your goal.”


With the foundation of your priorities and motivation settled, it’s time to establish the framework to build your financial future. That means crafting your goals in a way that makes them easier to achieve. The SMART template for goal-setting can help:

— SPECIFIC: Make your goals as specific as possible. If you want to curb your spending, for example, pin down how much you spend on unnecessary items each month. Then set an exact dollar limit for such spending.

— MEASURABLE: Choose a way to track your progress. If you’re paying down debt, think about using a debt tracker. Or if you want to save a certain dollar amount, consider visualizing your goal in a savings progress chart that you’ll color in as you go. — ATTAINABLE: Your goals need to be something you can accomplish within a year. If you’re paying off $10,000 in credit card debt, for example, find what you can realistically pay monthly, multiply that by 12 and use that amount as your goal. — RELEVANT: Choose goals that are meaningful to your personal values. Similar to finding your “why,” choosing relevant goals helps ensure that your 2021 financial plan is connected to your life goals. If you want to retire early, think about upping contributions to a retirement account so you’re on track to accomplish that multi-year goal. — TIME-LIMITED: Setting a deadline can keep the pressure on. And think about breaking up your overarching goal into smaller pieces that you’ll achieve on a monthly basis. Hitting monthly goals can provide a steady feed of accomplishments, which can keep you motivated. Take the SMART acronym a step further by tacking on an “R” for “reward.” Plan rewards for yourself as you make progress. The more enjoyment you get out of the process, the more likely you are to keep working at it. Say you want to reduce debt. For each $100 you pay off, find a way to treat yourself, maybe by making a nice dinner or having a DIY spa day at home. TACTICS TO BOOST YOUR PROGRESS Finally, here are a few simple tips to build momentum: — AUTOMATE: Taking a “set it and forget it” approach can make accomplishing your ambitions easier. For savings goals, try direct depositing a portion of your income into a high-yield savings account. And for debt payoff, set up automatic payments for an amount above the minimum due to ensure you’re making progress. — CUT YOUR INTEREST RATE: If less of your payment goes to interest, more of it goes to debt payoff. You may be able to reduce your rate by refinancing your mortgage, student loan or car loan. If you have credit card debt, see whether you can qualify for a debt consolidation loan or a balance transfer credit card with a 0% APR promotional period. _______________________________

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