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.

KNOW YOURSELF AND YOUR PRIORITIES

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...