Your Guide to Setting Financial Resolutions

Tracey Turko, CFP®, MPAS®

Sr. Wealth Advisor, Sr. Director


New year, new resolutions. Learn how to set attainable financial goals that stick in 2024 and beyond.

Couple sitting at kitchen table looking at laptop.

Many people see January as a reset month and make resolutions that they hope to carry throughout the rest of the year. These resolutions often center around exercise, eating habits, and other health or fitness goals. But the beginning of the year is also a great time to set financial resolutions, like saving more money, putting a down payment on a new house, starting a new business or investing more wisely. Whatever the goal, January is the ideal month to reflect on the past year from a financial perspective and create a plan for where you want to be at the end of the year. Here are a few tips to help you set and accomplish your financial resolutions in 2024.


Framing SMART goals

Many people make their resolutions in haste and don’t fully think about the actual goals they’re setting. This can be a recipe for failure. In fact, research indicates that roughly 80% of people fail to keep their resolutions by February.1 One reason is that resolutions require the capacity for change; change causes friction and stress and when the going gets tough, we just give up and revert to our old ways and habits.

Another reason some people fail to keep their resolutions is because their goals are too big, or they set too many and there isn’t a priority about which goal to start on first. Also, humans often want results immediately, but accomplishing big goals typically requires changing habits over time; it typically takes 21 days to form a habit. 2

When setting goals – financial or otherwise – consider the SMART acronym. Goals must be Specific, Measurable, Attainable, Relevant, and Time-bound). Emphasizing specificity (S) and measurability (M) can help you focus on realistic and attainable (A) goals based on where you are today. Relevance (R) ties goals to specific objectives like saving for retirement or a college education.

Lastly, strategic financial goal setting should also be tailored to different time (T) horizons. Some goals take longer to accomplish than others but can also change as your financial situation changes or as you hit life milestones. For example, paying off debt or establishing an emergency fund might be accomplished over the next twelve months, but saving for a college education or retirement often spans many years. Medium and long-term goals should be broken down into manageable chunks that can be accomplished each year. Consider financial goals based on three different time horizons:

Short-term goals (1-2 years):

  • Pay off a line of credit or other high-interest debt, build emergency savings and cut nonessential expenses for immediate financial goals
  • Transitioning from long-term to short-term goals as priorities evolve, emphasizing cash reserves over long-term returns

Medium-term goals (3-9 years):

  • Balancing savings and long-term returns for goals beyond a couple of years
  • Example: Planning to start a business in 7-9 years requires a mix of growth-oriented and short-term liquid investments like money market funds

Long-term goals (10+ years):

  • Prioritize financially secure retirement, recognizing the extended time horizon
  • Diversified portfolios historically outpace inflation, offering higher returns over longer periods
  • Long-term goals like education expenses may involve only four years of costs


Getting started in 2024

In terms of short-term goals and actionable ideas for 2024, in addition to building emergency savings, paying off debt, and revisiting your budget, here are my favorite financial resolutions that can be starting points to better financial health:

  1. Update your financial plan: Review what you’ve accomplished over the last 12 months and set intentions for the new year. Discuss and review your plan with your wealth advisor to make sure it’s a good representation of your goals and values.
  2. Create a budget: How much money do you have to work with each month? A budget can help answer that question and help you make sure that you’re spending less than you’re earning. The fact is, unless you receive a large inheritance, win the lottery, or benefit from some other sudden windfall, the only way to build wealth over time is through diligent saving and investing.
  3. Tackle high-interest debt: Not all debt is bad. A mortgage, for example, can help you build equity in a home over time. However, high-interest credit cards or personal lines of credit can pile up and hurt your credit rating. Consider paying down any high-interest debt in 2024 or paying off the smallest debts first, then work on reducing larger ones.
  4. Save an emergency fund: If you’ve tackled all your high-interest debt and you’re ready to start putting money away, an emergency fund is a good place to begin. Ideally, your emergency fund should cover three to six months of living expenses, which includes housing costs, groceries, insurance payments financial emergencies, and unplanned expenses.
  5. Increase your 401(k) or other retirement plan contributions: If you participate in an employer sponsored 401(k) plan, consider increasing your contribution. For 2024, the contribution limit is $23,000 with an additional $6,500 catch up for individuals who are age 50 and above. If you don’t max out your contribution, try increasing the contribution by 1% every quarter. If you don’t have an employer-sponsored plan, consider starting or adding to an individual retirement account (IRA).
  6. Plan your charitable donations: If you are charitably inclined, this is a great time of year to plan out your donations for the next 12 months. There are many wonderful ways to contribute to charities. If you’re at least age 70, you could utilize a qualified charitable donation (QCD). This is a tax-efficient way to make donations from your IRA accounts. You could also establish a donor-advised fund (DAF), which is an account for the sole purpose of supporting charitable organizations and donations typically have tax advantages.
  7. Review your insurance coverages: Review all insurance coverages with an insurance agent or your financial advisor (note that Mercer Advisors also offers insurance as a service). Don’t overlook property and casualty insurance. The goal? Make sure you are covered appropriately. Review your life, health and disability insurance as well. While you’re at it, you might want to consider the tax benefits of a health savings account (HSA).
  8. Review your beneficiaries: Many times, beneficiaries are established on IRAs and retirement plans and then forgotten. It’s important to periodically review your beneficiaries, and even more so if you experience a life-changing event such as a divorce or death of a spouse.
  9. Run a credit report: Federal law allows you to receive a free credit report every 12 months from each reporting agency (Experian, Equifax, and TransUnion). Be sure to review the credit report for inaccuracies or suspicious activity.

Any time is the right time to set financial goals, but the start of the year is the perfect opportunity to narrow the focus and get started. The ideas here certainly aren’t comprehensive, and chances are you’ve already thought of some unique financial resolutions of your own. If your goals are more complex or longer-term in focus, reach out to Mercer Advisors to help you build a plan that’s best suited for your situation and financial goals.

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