Setting Financial Goals: A Comprehensive Guide to Achieving Your Dreams
How to set financial goals?
Do you feel like you try so hard to make the right decisions with your money but can never move forward? Or have you been working, but don't have much to show for it at the end of the month?
Yes, things like inflation and recession are real, and they can seem like big hurdles. But if you don't set any goals for your money, chances are you still feel like you're spinning your wheels, even when the economy isn't crazy.
What is the financial goal?
A financial goal is any plan you have for your money. You may have short-term financial goals (like saving up to $1,000) or long-term financial goals (like investing for retirement). You should set goals for every area of your life, but having specific financial goals helps you put your money where your goal is.
Steps to Setting Financial Goals
1. Make your goal specific.
One of the reasons people don't achieve their goals is that they set goals that are too vague. You might say, "I want to get better with money." But what does that mean to you? Limit the search!
What if you decide to deal with your debt instead? This is a specific area of your finances that you need to focus on. Now, let's talk about how we can further break down this goal.
2. Make your goal measurable.
Well, you want to pay off the debt. Now is the time to choose a specific amount, something you can measure to see if you have achieved your goal.
While your ultimate goal should be to be completely debt free (and that's baby step 2), it's a good idea to break that goal down into smaller chunks. This way, you won't feel so defeated before you start.
3. Make sure they are your own goals
Let's talk comparison for a moment. It's easy to look at what other people are doing and feel like you should be doing it too. Do your neighbors drive late-model cars? Is that girl on Instagram always taking extravagant vacations? Hey, good for them! But that doesn't mean you have to do the same.
When we compare ourselves to others, we are playing a game that we will never win. So be sure to set financial goals that make sense to you. In other words, just because all your friends are taking out second mortgages to renovate kitchens doesn't mean you should. Put on your blinders, focus on your path, and cross the finish line. And be clear about why you chose the goals you set for yourself.
Write your goal
Did you know that you are more likely to achieve your goals if you write them down? Yes, that's right, there's just something about putting pen to paper that helps you accomplish the task at hand.
So, go ahead and write down your goals. Then put it in your car, on your desk, or in your bathroom mirror. Write it down in the Notes app on your phone, take a screenshot, and set it as wallpaper so it's the first thing you see when you pick up your phone. Keeping your goals where you can see them will keep you on track and motivated.
common financial goals
With so much financial "advice" available, it can be hard to know which financial goals are right for you. As I said before, start with Baby Steps to discover your big financial goals. But there are also smaller goals that can help you reach those milestones.
Here are some of the most common financial goals people set and tips on how to reach them.
1. Create a budget and stick to it
Budgeting is not only one of the most important financial goals people set each New Year, but it is also the foundation on which you should build all of your other financial goals.
A budget is how your money gets ahead. It is a plan of what comes in (your income) and what goes out (your expenses). You are telling your money where it should go, instead of wondering where it went. So you can feel confident that you're taking steps toward your goal every month.
A budget helps you gain momentum in every area of your finances. If you're already budgeting, bravo! If not, start free with EveryDollar.
2. Create an emergency fund
Life happens. But you can be prepared for any financial trouble that comes your way if you have enough money saved. I mean car trouble, medical bills, and broken toilets (you know, some of the worst aspects of being an adult). But when you have an emergency fund, you can rest well at night knowing you won't have to go into debt to cover those times.
When you have an emergency fund, you are prepared for those moments when "life happens." Instead of worrying about what might happen next, you'll feel confident that you have money set aside to deal with it.
3. Get out of debt
If you're in debt, it's time to get serious about paying it off. Complete. Yes, I know this may sound impossible right now, especially if you have some big numbers staring you in the face. But listen, debt isn't moving you forward, it's holding you back. You can't get on with your money if it always goes to payments.
If you want to free up more money to use for your goals, check out Financial Peace University (FPU). This course will show you exactly how to get out of debt for good and move through the Baby Steps.
4. Spend less and save more
Many people ignore the goal of “I want to spend less” or “I want to save more” without thinking about what it means to do these things. But you must be intentional with your money habits.
Create and stick to your budget each month, find deals, use coupons, and pay cash. This is the important thing: learn to say no, even to yourself! I'm not saying you should never have fun. But if you want to save money, you'll need some planning and lifestyle adjustments.
5. Save for your retirement dreams
Take a moment to imagine your perfect retirement. Do you want to pack up your grandkids and go to Disney every Christmas? Do you visit a new country with your wife once every three months? Have you read all the books on your shelves? Do you have an interesting hobby?
No matter what you dream about in the future, you'll need good retirement investments now to make it happen. So once you're out of debt and have your emergency fund fully funded, I want you to start investing 15% of your family's income for retirement. And guess what? When you're debt-free, all that money you've been sending toward payments is now investment fuel for your retirement dreams!
An example of a financial goal in progress
Alright, now that you've gone over the basics of financial goal planning, let me give you an example of how this works in real life.
After a while, my husband Winston and I decided to build a house. Before that, any additional income we earned went directly into our overall savings. But he knew that it would cost a lot to build a house, and random expenses would arise in the process.
So we set out to save as much as we could, especially for our home. And while saving that much money seemed almost impossible, breaking it down into monthly goals gave us a lot of momentum. Having a plan for our money not only made our dream possible but also made the process fun!
It's also what kept spending trends (aka spending, trust me, it's a thing) in check. Knowing that my money would go to something I wanted motivated me to spend less.
Do you feel like you try so hard to make the right decisions with your money but can never move forward? Or have you been working, but don't have much to show for it at the end of the month?
Yes, things like inflation and recession are real, and they can seem like big hurdles. But if you don't set any goals for your money, chances are you still feel like you're spinning your wheels, even when the economy isn't crazy.
What is the financial goal?
A financial goal is any plan you have for your money. You may have short-term financial goals (like saving up to $1,000) or long-term financial goals (like investing for retirement). You should set goals for every area of your life, but having specific financial goals helps you put your money where your goal is.
Steps to Setting Financial Goals
1. Make your goal specific.
One of the reasons people don't achieve their goals is that they set goals that are too vague. You might say, "I want to get better with money." But what does that mean to you? Limit the search!
What if you decide to deal with your debt instead? This is a specific area of your finances that you need to focus on. Now, let's talk about how we can further break down this goal.
2. Make your goal measurable.
Well, you want to pay off the debt. Now is the time to choose a specific amount, something you can measure to see if you have achieved your goal.
While your ultimate goal should be to be completely debt free (and that's baby step 2), it's a good idea to break that goal down into smaller chunks. This way, you won't feel so defeated before you start.
3. Make sure they are your own goals
Let's talk comparison for a moment. It's easy to look at what other people are doing and feel like you should be doing it too. Do your neighbors drive late-model cars? Is that girl on Instagram always taking extravagant vacations? Hey, good for them! But that doesn't mean you have to do the same.
When we compare ourselves to others, we are playing a game that we will never win. So be sure to set financial goals that make sense to you. In other words, just because all your friends are taking out second mortgages to renovate kitchens doesn't mean you should. Put on your blinders, focus on your path, and cross the finish line. And be clear about why you chose the goals you set for yourself.
Write your goal
Did you know that you are more likely to achieve your goals if you write them down? Yes, that's right, there's just something about putting pen to paper that helps you accomplish the task at hand.
So, go ahead and write down your goals. Then put it in your car, on your desk, or in your bathroom mirror. Write it down in the Notes app on your phone, take a screenshot, and set it as wallpaper so it's the first thing you see when you pick up your phone. Keeping your goals where you can see them will keep you on track and motivated.
common financial goals
With so much financial "advice" available, it can be hard to know which financial goals are right for you. As I said before, start with Baby Steps to discover your big financial goals. But there are also smaller goals that can help you reach those milestones.
Here are some of the most common financial goals people set and tips on how to reach them.
1. Create a budget and stick to it
Budgeting is not only one of the most important financial goals people set each New Year, but it is also the foundation on which you should build all of your other financial goals.
A budget is how your money gets ahead. It is a plan of what comes in (your income) and what goes out (your expenses). You are telling your money where it should go, instead of wondering where it went. So you can feel confident that you're taking steps toward your goal every month.
A budget helps you gain momentum in every area of your finances. If you're already budgeting, bravo! If not, start free with EveryDollar.
2. Create an emergency fund
Life happens. But you can be prepared for any financial trouble that comes your way if you have enough money saved. I mean car trouble, medical bills, and broken toilets (you know, some of the worst aspects of being an adult). But when you have an emergency fund, you can rest well at night knowing you won't have to go into debt to cover those times.
When you have an emergency fund, you are prepared for those moments when "life happens." Instead of worrying about what might happen next, you'll feel confident that you have money set aside to deal with it.
3. Get out of debt
If you're in debt, it's time to get serious about paying it off. Complete. Yes, I know this may sound impossible right now, especially if you have some big numbers staring you in the face. But listen, debt isn't moving you forward, it's holding you back. You can't get on with your money if it always goes to payments.
If you want to free up more money to use for your goals, check out Financial Peace University (FPU). This course will show you exactly how to get out of debt for good and move through the Baby Steps.
4. Spend less and save more
Many people ignore the goal of “I want to spend less” or “I want to save more” without thinking about what it means to do these things. But you must be intentional with your money habits.
Create and stick to your budget each month, find deals, use coupons, and pay cash. This is the important thing: learn to say no, even to yourself! I'm not saying you should never have fun. But if you want to save money, you'll need some planning and lifestyle adjustments.
5. Save for your retirement dreams
Take a moment to imagine your perfect retirement. Do you want to pack up your grandkids and go to Disney every Christmas? Do you visit a new country with your wife once every three months? Have you read all the books on your shelves? Do you have an interesting hobby?
No matter what you dream about in the future, you'll need good retirement investments now to make it happen. So once you're out of debt and have your emergency fund fully funded, I want you to start investing 15% of your family's income for retirement. And guess what? When you're debt-free, all that money you've been sending toward payments is now investment fuel for your retirement dreams!
An example of a financial goal in progress
Alright, now that you've gone over the basics of financial goal planning, let me give you an example of how this works in real life.
After a while, my husband Winston and I decided to build a house. Before that, any additional income we earned went directly into our overall savings. But he knew that it would cost a lot to build a house, and random expenses would arise in the process.
So we set out to save as much as we could, especially for our home. And while saving that much money seemed almost impossible, breaking it down into monthly goals gave us a lot of momentum. Having a plan for our money not only made our dream possible but also made the process fun!
It's also what kept spending trends (aka spending, trust me, it's a thing) in check. Knowing that my money would go to something I wanted motivated me to spend less.
Goals will get you where you want to be
Financial goals will help you change the way you think, your habits, and ultimately, your life.
When you intentionally get every dollar you have, you will be able to increase your money. This means that you have to do more of the things you want to do and plan for the things you will do in the future.
You can do more than you ever thought possible, but you'll need to have some financial goals to help you get there. Decide what you want your future to look like and find out what you need to do today to make it happen.
And remember, it all starts with a budget. This is the foundation. is the plan. And this is how you intentionally spend your money. Go ahead and start your free estimate today with EveryDollar. Then follow these five steps to set and achieve your financial goals.
Financial goals will help you change the way you think, your habits, and ultimately, your life.
When you intentionally get every dollar you have, you will be able to increase your money. This means that you have to do more of the things you want to do and plan for the things you will do in the future.
You can do more than you ever thought possible, but you'll need to have some financial goals to help you get there. Decide what you want your future to look like and find out what you need to do today to make it happen.
• You can live on your terms instead of the bank.
• You can get out of debt once and for all.
• You can accumulate wealth and pay for the things that matter to you.
And remember, it all starts with a budget. This is the foundation. is the plan. And this is how you intentionally spend your money. Go ahead and start your free estimate today with EveryDollar. Then follow these five steps to set and achieve your financial goals.
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