By: Reed C. Fraasa, CFP®, AIF®, RLP®
“That men do not learn very much from the lessons of history
is the most important of all the lessons that history has to teach.”
― Aldous Huxley
As the calendar resets, millions of Americans sit down with renewed optimism and a fresh list of financial resolutions. Save more. Spend less. Invest smarter. Get organized. Yet by March, most of those good intentions have dissolved into the busy realities of daily life.
But here’s the truth: your financial goals aren’t failing because you lack discipline. They fail because they’re built in isolation—disconnected from the most powerful planning resource you have: what the past year already taught you.
Setting financial goals for the year ahead by grounding your plan in last year’s wins, challenges, and habits can significantly improve your results and your well-being. No one ever sets out to fail and become discouraged. Let me introduce a mindset shift that reduces guilt and increases progress: If you achieved 80% of last year’s goals, you succeeded. Perfection is not the target—consistent, values-aligned progress is.
1. Start With a Look Back: Last Year Is Your Blueprint
Before setting a single goal for the New Year, reflect on the year you just completed. This step is foundational—and often skipped.
Ask yourself:
What goals did I achieve, and what made them work?
What goals did I not achieve, and why?
Did life, business, or family priorities shift?
What market, economic, or tax changes affected my planning?
Were my goals aligned with my values—or someone else’s expectations?
As you reflect, remember, achieving 80% of your goals is success, not failure. Life is unpredictable. Markets move. Careers change. Families evolve. If you consistently hit most of what you planned, it means your system is working effectively.
For a deeper value-alignment exercise, explore “Making Your Money Match Your Values: A Financial Planning Guide for the New Year”
This reflection helps you enter the New Year with clarity, rather than vague ambition.
2. Turn Lessons Into SMART, Values-Driven Goals
Once you understand what last year taught you, translate those insights into SMART goals—Specific, Measurable, Achievable, Relevant, and Time-bound.
Examples:
Instead of: “I need to save more.”
Try: “Increase my 401(k) contribution by 2% starting in January.”
Instead of: “I want a better savings cushion.”
Try: “Grow my emergency fund from 3 to 6 months of expenses by September.”
Make sure each goal is grounded in your reflection. If your business had an unpredictable cash flow last year, you might prioritize building liquidity before increasing long-term investments. If you realize your expenses have crept up, you might consider building a tracking system into Q1.
To help with goal structure and cash-flow planning, see: “What To Do With Your Paycheck”
This guide breaks down how to turn income into intentional action.
3. Prioritize With an Impact-vs-Effort Lens
You don’t need 15 goals. You need the right goals.
Use a simple but powerful prioritization method: Impact (how much the goal moves your financial life forward) vs. Effort or Cost (time, discipline, or dollars required)
Examples of High-Impact, Low-Effort Goals:
Automating savings or investment contributions
Scheduling quarterly financial check-ins
Updating beneficiaries or estate documents
High-Impact, Higher-Effort Goals:
Paying down large debt
Scaling a business
Funding a significant home improvement
Increasing retirement or college contributions meaningfully
Low-Impact, High-Effort Goals (often distractions):
Organizing paperwork instead of solving root financial issues
Cosmetic lifestyle upgrades that weaken cash flow
Prioritization ensures you’re not spreading yourself thin.
4. Build a Roadmap with Quarterly Milestones
A 12-month goal is too distant. Without checkpoints, it becomes wishful thinking.
Break your plan into quarterly targets:
Q1 → Planning & Implementation
Finalize goals, automate savings, review debt, and set up a tracking system.
Q2 → Measurement & Adjustment
Assess progress. Revise contributions or timelines. Address challenges early.
Q3 → Sustain & Strengthen
Q3 is where most plans often falter—due to summer distractions, market noise, and increased busyness.
Re-engage with: “Q3 Crunch Time: Keep Your Financial Goals from Derailing”
Q4 → Evaluate & Document Lessons
What worked? What didn’t? What should you carry into next year?
This closes the loop—and prepares you for another 80%-success year.
5. Plan for Flexibility: Life Isn’t Linear
Rigid financial plans break. Flexible plans adapt.
Build scalability into your goals by:
Maintaining or increasing your emergency fund
Using percentage-based savings goals rather than fixed numbers
Revisiting income projections quarterly
Stress-testing goals: What if income drops? What if markets dip?
Preparing emotionally for volatility
For help managing emotional decision-making and behavioral biases, explore: “Two Strong Years, a Crash Ahead? Debunking Market Myths and Behavioral Biases”
Flexibility improves resilience—and results.
6. Add Accountability (Your Secret Weapon)
Goals become real when shared, tracked, and reviewed.
Ways to stay accountable:
Share your goals with a partner, advisor, or friend
Use automated reminders or budgeting tools
Review progress every quarter
Celebrate wins—even partial ones
Work with a financial advisor using a structured framework like our Person is the Plan® process
Accountability converts intention into momentum.
7. Translate Last Year’s Lessons Into This Year’s Success
Here are examples of how last year’s insights can shape this year’s goals:
Last Year: Cash flow was more volatile than expected
This Year: Build a 3-month liquidity reserve by mid-year
Last Year: You let market noise influence investment behavior
This Year: Schedule quarterly portfolio reviews and revisit
“What If We Planned for What Could Go Right?”
Last Year: You reached 75–85% of your goals
This Year: Acknowledge that this is success—and refine, not overhaul, your strategy.
Conclusion: Your Best Financial Year Starts With Last Year
Setting financial goals is easy.
Setting the right goals—those aligned with your values, informed by experience, and grounded in realistic expectations—is what creates meaningful long-term progress.
Remember:
🎯 If you hit 80% of your goals last year, you succeeded.
🎯 The objective isn’t perfection—it’s consistent improvement.
🎯 Last year provides clarity that this year can build on.
Reed C. Fraasa is a CERTIFIED FINANCIAL PLANNER™ and founder of HIGHLAND Financial Advisors, a Fee-Only financial planning firm that offers comprehensive financial planning, retirement planning, and investment management. Reed has 30 years of experience as a fiduciary advisor and is the author of The Person is the Plan®, a unique financial planning process. Reed was a frequent guest contributor on PBS Nightly Business Report and has been featured in the New York Times, Wall Street Journal, and Star Ledger newspapers.
The foregoing content reflects the opinions of Highland Financial Advisors, LLC, and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions, or forecasts provided herein will prove to be correct.
Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses, which would reduce returns.
Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful or that markets will act as they have in the past.
The above article was written with the assistance of artificial intelligence (AI).