I usually start thinking sometime in mid-November about what goals are most important to me for the upcoming year and try to finalize them by the last week of December. I think about what matters to me personally, what matters to my family, and what matters to my career.
I like to choose about 3-5 key goals to focus on and then figure out how to measure progress. For things like "Lose 30 Pounds", it's very easy to track. For more nebulous ones like "Invest Time in my Marriage", it can be hard to quantify progress, so for that one I created a monthly relationship survey that my wife and I both fill out to score each other numerically on things like "I feel my partner listens to me" or "I feel my partner is spending enough time with me". It may sound weirdly clinical, but it actually became a fun ritual to evaluate each other every month and was really helpful to pinpoint where my partner felt things were great and where things could be improved.
It's also interesting to look back on the data and see how progress (or lack thereof) toward one goal often impacted another -- for instance, as we were in the thick of closing on our house, my progress on my book editing stalled. In a challenging month between my wife and I, I gained weight instead of losing it.
A big part of this is choosing good goals -- specific, measurable goals are important. It's also been important for me to choose goals that I feel really confident I can achieve in the course of a year, rather than choosing goals which are too ambitious. For 2022, I was tempted to make my goal "Lose 50 pounds" instead. I'd actually had the goal of "Lose 50 pounds" in prior years and failed badly in trying to achieve it. I think because it's such an ambitious goal, once I fell behind, it felt impossible to catch back up. The more modest and achievable goal of losing 30 pounds was perfect for me -- meaningful enough for real progress, but realistic enough to allow for some slowdowns or screw-ups along the way.
Tracking progress also helps with reflecting on the previous year -- in my case, one of my goals in 2022 was to release another game, but I'm not going to accomplish that one. It's really helpful to look at what I earnestly thought I'd be able to achieve this year, figure out what went wrong, and make a better plan for 2023.
[0] For anyone that's interested, here's a sample of my progress tracking spreadsheet -- nothing complicated, but it can be helpful to have a predetermined structure in place. Feel free to make a copy for your own use: https://docs.google.com/spreadsheets/d/13G9L1t82BtIggxEqeFUV...