🎯 Financial goal setting: Ready, set... goals!
- Kacper Duda
- Jan 8
- 3 min read
And so 2025 has arrived. We're not big fans of new year resolutions but we do like a good plan to execute against! The start of the year is always a good time to look at the 12 months ahead, understand what we want to achieve and make sure we will have the financial means when required.
So to put you on good footing for the new year, we'll focus on goal setting today.
Set your goals for 2025
Depending on the type of person you are, this may be crystal clear to you, or something you've not given much thought to. From a financial planning perspective, you should look at all things that will require a more substantial amount of cash.
This exercise should be done with pen and paper in hand. Writing down goals reinforces them, allows you to check back on them and change or adapt them over time.
To give you some examples of things you may want to think about:
Increasing your savings or investment pot
A big family holiday or two
Sending your kids to school / university
Personal development courses
Buying / upgrading your car
Moving house
Buying a property
Launching a business
If some of these are on your radar for 2026, it's good to start thinking about them now. The more of a runway you have, the more you can do about it without straining your finances.
If you have a partner, we would encourage you to go through this process together with them so you can both be on the same page. Do it over dinner / drink one evening, and we promise you it can be a fun and exciting conversation.
Understand the financial requirements
It's important to understand what each of your goals is going to cost you. Do some research, understand your options and associated expenses, and start planning accordingly.
For each goal, you should ask yourself and write down the following:
How much money will you need? - Rather self-explanatory, this is the amount of cash you need to be able to achieve the goal.
When do you need to have the funds available? - Watch out for any advance payments (e.g. holiday flights), deposits, fees or money required to prepare for something.
Do you have anything set aside for it already? - Already started to save for something last year? That's great, it will give you a head start this year.
What is the funding gap? - How much more do you need to come up with by the deadline
Having this foundation allows you to start planning for the months ahead.
Know how you will finance your goals
For some items, you will have a choice on how to pay for them:
Cash: Cash is king, they say. In some cases cash will be your only option, in others it may well be cheaper to avoid interest payments and pay cash upfront.
Loan / mortgage: Houses, flats and cars can all be purchased on finance but factor in any upfront expenses such as deposits, fees, and refurbishment costs and include them in your financial plans. Most importantly, make sure you can afford the monthly repayments afterwards - it's not worth falling into a debt spiral.
Credit card: Wherever you can, you should pay by credit card for the added protections and benefits they offer. However, remember to pay it off in full the following month - don't treat it as a means to finance your goals.
Linking your goals to your budget
Now that you understand how much money you need to come up with, and by when, it's time to build that into your monthly budget.
You will need to prioritise expenses that come earlier in the year and start setting leftover money aside for these in the first months of 2025. This may also require adjusting what you spend or rebalancing your goals a little.
We'll cover more budgeting tips next week so you can see how you can implement this for yourself.
Happy New Year!
Disclaimer: Please bear in mind that this email does not constitute financial advice. Any choices you make you are solely responsible for. We always aim to provide highest quality, independent views but do your own research to ensure you’re comfortable with any changes you make to your personal finances.
