z)2) Setting and Achieving Financial Goals

 Setting and Achieving Financial Goals

Do you feel like you’re trying so hard to make the right decisions with your money but never seem to get ahead? Or have you been working your butt off, maybe even picking up a side hustle, but you don’t have much to show for it at the end of the month?

Sure, things like inflation and recessions are real and can feel like huge road blocks to your financial goals. But even when the economy isn’t going crazy, if you don’t set any goals for your money, you’ll definitely feel like you’re spinning your wheels.

If you want to make progress with your money (for real), you need to set some financial goals. But don’t freak out. I’m going to help you figure out what your financial goals actually are—and share the steps to reach them. You’ve got this!

What Is a Financial Goal?

A financial goal is any plan you have for your money. You can have short-term financial goals (like saving up $1,000) or long-term financial goals (like buying a house or investing for retirement). It’s a good idea to set goals for every area of your life, but having specific financial goals means you’re committing to what you want out of life by planning to save and spend money for those things.

But depending on your relationship with money, trying to decide what to do with it can feel as overwhelming as choosing what to watch on Netflix or as exciting as planning a vacation to Disneyland. There are so many options. But you can’t watch all the home makeover shows or ride all the rides at once. You’ve got to pick and choose, and I recommend tackling your goals in an order that’ll set you up for lifelong success. But first, let’s talk about how you can get in the mindset of setting goals.

6 Steps to Setting Financial Goals

Lots of things can influence the way you set your financial goals, including your motivations, values and dreams for the future. And the way your parents handled money and even your own spending and savings habits (which are unique to you) also has a major impact on how you handle money.

Goal planning takes intention and some self-awareness, so carve out time to think about your goals. Find a few minutes to sit down with a cup of coffee or a glass of wine and get ready to dream—big! Once you have a list of goals for your money in mind, you’re ready to break them down into smaller, actionable steps. Here’s how:

1: Make your goal specific.

One reason people don’t hit their money goals is because they’re too vague. You might say, “I want to be better with money.” But what does that actually mean to you? Narrow it down. Or, “I want to upgrade my car someday.” Okay, fun! But what kind of car do you want, and when do you want to buy it?

What if you decided instead to tackle your debt? That’s a specific area of your money to focus on. Now, let’s talk about how to break this goal down even more.

2: Make your goal measurable.

Okay, so your goal is to pay off debt. Now it’s time to pick an exact amount—what you can measure to know if you hit your goal or not.

While being completely debt-free should be your ultimate goal, it’s a good idea to break down that goal into smaller chunks. That way, you have a vision of where you’re going before you get started.

Say you have $30,000 of total debt. You’ll want to start by paying off your smallest debt, like a $15,000 student loan, first. That’s what I mean by setting a measurable goal.

3: Give yourself a deadline.

Here’s the deal: It’s super easy to put off your goals when they aren’t time-sensitive. Stop saying you’ll start someday. You need to give yourself a deadline and make it reasonable—but also a little challenging.

Back to the student loan example: When do you want to hit your goal? If you want to pay off $15,000 in one year, you’ll need to pay $1,250 each month. Is this possible but also a bit of a stretch? If so, good!

Now, some goals fall into the short- to mid-term category, and these can be tackled in less than five or so. Think of long-term goals as ones you’ll achieve in five years or more. Here are some examples of short- and long-term financial goals:

Short- and mid-term financial goals:

Saving up an emergency fund

Saving for a vacation

Paying for books for an upcoming semester of school

Buying a new kitchen appliance or renovation

Saving for an engagement ring

Putting down a deposit on an apartment lease

Saving for upcoming medical or dental services

Buying birthday or Christmas gifts

Saving a house down-payment

Long-term financial goals:

Buying a new car with cash

Paying for your kid’s college in cash

Saving for retirement

Launching a business

Traveling for several months at a time

4: Make sure they’re your own goals.

When we compare ourselves to other people, we’re playing a game we’ll never win. So, make sure you’re setting financial goals that make sense for you. In other words, just because all your friends are taking out second mortgages to renovate their kitchens doesn’t mean you should. Is that one Instagram influencer taking another extravagant vacation? Hey, good for them. But that doesn’t mean you need to do the same thing—or that you’re behind in life if you’re not in the same place. Put the blinders on, focus on your goals, and stay in your lane. And be clear on why you’ve chosen the goals you have.

5: Write your goal down.

Did you know you’re more likely to achieve your goals if you write them down? Yep, it’s true—there’s something about putting pen to paper that helps you commit to the task at hand.

So, go ahead and write down your goals. Then, stick them in your car, to your desk, or on your bathroom mirror. Type them in a notes app on your phone, take a screenshot, and set it as your 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.

6: Get a goal accountability buddy.

To take your goals one step further, find a goal accountability buddy. This could be your spouse, a close friend or a community—anyone who will cheer you on and check in as you keep working on hitting your goal. Having a cheerleader in your corner and knowing you’re not alone can make a huge difference as you work toward your goals.

5 Examples of Financial Goals

With so much money “advice” floating around, it can be hard to know which financial goals you should aim for first. This is why I have to mention the Baby Steps when I talk about setting financial goals. The Baby Steps will help you save for emergencies, pay off debt, and build wealth. But there’s a process to follow.

Should you pay off debt first? Save for your kids’ college? Buy a house? Invest for retirement? The 7 Baby Steps cut through all the confusion and give you a clear path to do all those things. Following the steps will help you focus on one goal at a time so you can make more progress with your money and feel financial peace.

If you have no clue what financial goal to go after first, start by taking this quick assessment to find out what Baby Step you’re on.

Here are some more of the most common financial goals people set and tips for making them happen. Are any of these on your list?

1: Create and stick to a budget.

2: Build up an emergency fund.

3: Get out of debt.

4: Save up for your dream retirement.

5: Spend less and save more.

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