Didn’t Reach Your Savings Goal Last Year? Here’s How To Do Better in 2024
Written by
Addie Johnson Talbott
Edited by
Carly Brashears
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The new year is in full swing. But if you’re like many people, you’re reeling with one or more financial regrets from 2023.
You know how to budget, you had the best intentions when it came to hitting your savings goals, but an honest look at the numbers shows some serious neglect.
You’re not alone. Data from 2023 shows that while total personal savings in the U.S. is slightly over $800 billion, half of Americans have less than $500 saved.
To bounce back from last year’s financial setbacks, you’ll want to call on your emotional resilience and practical planning skills. Here’s how to regain your financial footing with a robust and realistic plan for the year ahead.
Shake Off the Funk and Build Your Money Mindset
Understanding Financial Regrets
If you’re beating yourself up for how you handled your savings account last year, the first step is to acknowledge and understand your regrets.
Enrich Fiscal Fitness founder Helen Huang, an eight-year veteran of teaching personal finance to high-performing women, puts it like this: “Consider your regret as feedback to yourself, and don’t dwell on it. Self-recrimination is unnecessary, and most likely, inaccurate. Even responsible people can get trapped under obligations that are too heavy to carry.”
Reflect and Reframe Your Missed Savings Goals
Take a moment to examine the root causes of falling short on your goals. Life is unpredictable, and financial setbacks are part of the journey. Did unexpected expenses arise? Was your budget realistic? Appreciate that failures provide the key learnings you will need to do better next time.
For example, your budget might have been so restrictive that you ended up splurging out of sheer exhaustion. Don’t forget to build in ways to take care of yourself and enjoy life.
Before Planning, a Confidence Boost
Before you sit down to refresh your savings plan, Huang advises taking a moment to remember all the good things you did this year. What friendships did you build or maintain? What skills did you learn? What work did you do that you’re proud of?
Remember, says Huang, “this particular outcome from last year isn’t the full picture of what you can do.”
Your Step-by-Step Comeback Plan for Savings
Refresh Your ‘Big Why’
First, reconnect to the deeper reasons behind your savings plan. Imagine you planned to put away three to four months of living costs just in case. This is a healthy goal, Huang says, but “some people aren’t motivated by the general potential of having to pay for emergencies or interrupted work.”
Reevaluate your savings plans to provide a more meaningful why: maybe you want three to four months living costs to travel around the world, or to create a ramp for a long-awaited career pivot. If you do end up needing the funds for genuine emergencies, you’ll be grateful you have them.
Set Realistic Goals
Remember, small and consistent steps pay off. Use the SMART criteria (Specific, Measurable, Achievable, Relevant, Time-bound) to structure your goals effectively. For example, Huang has noticed that when budgeting, we tend to keep our annual salary in mind, but this is a big mistake.
If you make $75,000 a year, you might have a $6,250 monthly budget in your head, but after deductions you’re probably taking home around $55,000 a year, or $4,583 per month, depending on where you live. Additionally, make sure you really understand your bills, along with any fees and interest rates, so that you know how much you are paying to carry a balance on credit cards.
When you’re realistic about what your actual costs are, you can make informed decisions. Maybe a big savings goal shouldn’t be your priority this year.
“There’s an order to these things,” Huang said. If you’re carrying high-interest debt, it may make more sense to pay that off first so you can prioritize savings after stemming the financial bleeding.
A New Plan Every Month
Huang suggests that once you have a realistic sense of your income, you can and should make a new spending plan from month to month. Things change, miscellaneous events and responsibilities come up, and with monthly check-ins you can recalibrate as needed rather than toss your whole savings plan out the window.
She also suggests having a system that allows you to check in on your actual spending every week, to track progress on your monthly budget and goals.
Automate It!
When it comes to unpleasant tasks, automation beats willpower every time. Faced with the decision to spend or save, saving will often take a back seat. Eliminate the decision altogether by pre-setting transfers to bills or savings accounts from your paycheck, giving the bank enough time to make your paycheck funds available.
Lean On Trusty Financial Tech
In the digital age, apps and online tools can simplify financial tracking. Automate savings transfers, set up account alerts for budget overspending, and use budgeting apps to streamline your savings progress.
Finally, Huang shares these quick tips to jumpstart your 2024 progress:
- Shop around for better insurance policies to lower your monthly or annual bills.
- Return items that you bought but don’t need – get a double win by decluttering and reclaiming funds!
- Reduce costs across the board – one easy place to start is with subscriptions.
- Improve your investment portfolio — schedule a check-in with a trusted advisor.
- Negotiate fees — many vendors would rather lower their fees than lose you as a customer.
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