Financial Goals

How to Set Financial Goals

Many people set financial goals at the start of the new year. Sure, there are many kinds of financial goals, including getting out of debt, building an emergency fund, or saving money for something expensive. Whatever your financial goals are this year, you can benefit from learning some useful ways to help you reach them. Read on to learn more about it.

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What are financial goals? Financial goals are the personal, big-picture objectives or plan you set for how you’ll save and spend money. You can have short-term and long-term goals. For example, saving up $2,000 is a short-term goal, while investing for retirement is a long-term financial goal. Your goals should give you focus and keep you accountable, no matter how long they take to make happen!

Consider these four important questions regarding setting financial goals: What are my financial goals? Have I written down my financial goals? How often do I look at them? If I want to revise the accomplishments I plan to achieve in life, what revisions will I make?

The Importance of Setting Financial Goals

The one fact in life about money that is clear is that while you can succeed at things accidentally, you’re more likely to experience success if you plan for it by setting goals and sticking to your realistic plan of goal achievement.

If you want to become successful financially, you’ll be much more likely to experience success if you:

  • Create A Plan
  • Track the Plan
  • Review the Plan
  • Adjust as Needed
  • Keep Moving Forward

Don’t just do nothing and wait for the accident. That’s ridiculous!

Having meaningful goals can set you on a path to a debt-free life, and guide your journey to financial freedom. The benefits of setting financial goals all work together to boost your financial health. You’ll gain more confidence in your money management decisions and significantly decrease money-related stress.

My financial goals are clear to me. I often re-visit my goals to ensure I am heading in the direction that best suits me. Therefore, the things I wish to accomplish are fresh and ever-present in my mind. However, I have a list of steps I take to reach the prize of achieving a financial goal.

The clarity of my financial goals keeps me on a positive track. I know my purpose because I have goals. Being sure of my goals ensures I live a life that is fascinating, adventurous, and fulfilling. Because I have clear goals, I fully embrace each day.

Daily, something important happens that’s related to one of my financial goals. Consequently, when it does, it brings me great joy because I know I am making my way along my chosen life path.

Thanks to my financial goals, I have initiative and motivation in my life. I know what I want to achieve and this self-knowledge drives me to accomplish my personal financial goals.

If you want to set yourself up to be financially secure, find small (or large) sacrifices you can make right now. Remember, the way you interact with your money today will impact your future.

7 Common Financial Goals

Okay, it can be hard to narrow down which financial goals are right for you. Where do you even start?

Yet, every single year, millions of people make two very popular New Year’s Resolutions. The first one is to lose weight and get fit… and the second is to make more money and get their finances in order.

Here are some personal financial goal examples to help get you started.

  • Create an Emergency Fund. Life is unpredictable – Be prepared.
  • Get Out of Debt.
  • Save for Retirement.
  • Strive for Homeownership.
  • Pay Off the Car.
  • Invest in a College Education.
  • Plan for Fun.

However, the truth of the matter is that most people will give up on their resolutions within the first three weeks of January. The few that remain often drop off by March… and their lives never change.

There’s a reason for this – making resolutions and setting goals is the easiest part of the process. Following through is what separates the winners from those that don’t achieve their goals.

In this article, you’ll learn how to set financial goals, a process that can apply to any year. The method is evergreen and will work forever. Let’s get started.

  1. Create a Budget

It’s extremely important to track your expenses when you’re trying to save money. Not only is budgeting one of the top financial goals people set each new year, but it’s also the foundation on which you should build all other money goals. Budgeting allows you to see where every penny of your income goes.

This money strategy also helps you to realize what your priorities are, letting you stay on top of things. For instance, you might not recognize how much money you spend buying coffee at Starbucks every day until you actually track it down.

Below are some essential questions to ask yourself to help assess your financial situation…

  • Are you in debt?
  • Are you struggling to make ends meet?
  • Do your expenses exceed your income?
  • Do you want to invest but have no idea how to?
  • Do you wish to earn more?

Just by answering these questions, you’ll have a better understanding of what you need to do to improve your financial situation.

  1. Pay Off Debt

One budget killer is debt. Specifically, credit card debt. If you don’t manage your debt, you can end up living paycheck to paycheck even if you have a good income. This can be very difficult for someone to accept, but it’s easy to get into debt if you’re not tracking and paying attention.

Life can get away from us and time passes before we know it. If you have gotten yourself into a lot of financial trouble, you may want to consider some form of debt management or even bankruptcy.

So, if you’re in debt, your goal should be to settle off all your debt, especially revolving credit such as credit lines, outstanding credit card bills, and so on.

Debt is insidious and will sabotage all your financial goals if it’s left to fester and grow. Make a debt repayment plan and pay off your debt.

  1. Create An Emergency Fund

Even if you’re in debt, you should put aside a small sum every month to build an emergency fund. It’s not the amount you save, but the habit which matters. Some people’s budgets may be so tight that all they can set aside is $10 every two weeks.

If that’s the case, go ahead and save that $10. Over time, you’ll have $100 or so. Just having this little bit extra will subconsciously shift your mindset. You’re no longer broke.

You’d be amazed to discover that when you’ve always been living paycheck to paycheck, just having a little bit extra socked away in a safe place can give you peace of mind and hope.

So, save whatever you can regularly. You may even wish to start a side hustle just to build an emergency fund. Ideally, you want at least 6 months’ worth of income saved up to tide you through tough times.

  1. Become Financially Literate

Most adults lack financial literacy, and it’s NOT their fault. Managing your budget, investing in stocks, calculating taxes, managing debt, etc. are crucial life skills. But we’re not taught these skills in school.

That’s because the system is designed to keep people clueless and working like slaves while being perpetually in debt. The key to finding financial freedom is to become financially literate.

While you don’t need to master actuarial science or macro accounting, you do need to know how interest is charged on your credit cards and be savvy about other personal finance topics.

If you wish to invest in stocks, you’ll need to read books on investing so that you can proceed cautiously, instead of plunging in blindly and losing the shirt off your back.

Countless people never spend time educating themselves on finance and just follow ‘insider tips’ given by family members or friends. They’re lured by the promise of quick profits, and end up losing their money.

Even if you’re in debt and don’t have the money to invest right now, you can still borrow a few personal finance books from your library and read through them. This is a dry topic, but after a while, you’ll get the hang of it. Now, you’ll be ready to invest.

Make financial literacy one of your goals this year!

  1. Start A Side Hustle

It’s true! The internet has made ordinary people millionaires. Gone are the days when you needed a lot of capital to start a brick-and-mortar business.

These days, with a few hundred dollars, you could start an online business and be making 4 to 6 figures a month – once you get it all to work. There are mom bloggers earning 5 figures a month selling courses and printables! This is an extreme example, but you get the point.

Never has there been a time in history when it has been this easy to become an entrepreneur. The internet has put wealth within the reach of most people who are willing to do the work and take a chance on themselves.

Set a goal to create a side hustle or a secondary income stream for yourself, over and above what you’re currently getting paid at your day job.

The extra money you earn will not only help you to pay off your debt faster, but you’ll also be able to set aside money to invest for retirement and so on. There’s immense potential for generating money online.

  1. Create A Financial Plan

Once you’ve assessed your financial situation, take a piece of paper and write down the numbers. Make a budget and a plan. Decide how much you’ll pay towards debt, how much you’ll save… and if it’s possible to set aside money to invest.

You MUST get intentional about your money – have a financial plan to follow – or you’ll end up spinning your wheels and losing your way.

  1. Start Investing

Once you’ve settled most or all of your debt, and you have some money to invest, you’ll need to assess your risk level. Generally, the younger you are, the more risk you can handle. Time is your ally and you can recoup any losses.

Older people who need money for retirement will be wise to put their money in stable investments such as bonds or S&P 500 ETFs.

Risk and volatility are NOT for you… unless you have money to burn and don’t mind risking loss to make more money.

Before investing in stocks, bonds, or index funds, do your research and see which vehicles of investment are best suited for your risk appetite. Some people prefer stocks while some prefer index funds… and others prefer crypto.

There’s no right or wrong answer here. Only what’s right for you. It’s important to plan your approach wisely.

Once you’re ready, start investing. Go slow, learn the ropes and slowly diversify your portfolio and scale up.

Ultimately, you’ll want to reach the end of the year totally debt-free, with an emergency fund, a lucrative side income, and some investments. This is an ambitious goal, especially if you’re laden with student debt or other commitments.

Nevertheless, set an ambitious goal and work towards it with all your heart and might. You’ll be amazed by how much you can achieve when you’re focused. Get started on your goals today.

“Financial success, as well as most success in life, is not about perfection. It's about direction.” - Donald Lynn Frost.Click To Tweet

Employ the Power of Setting Financial Goals

Do you make smart plans for your future?  Would you like to live your life according to a plan? It is difficult to end up in a good place by accident. By having plans and goals, you increase the likelihood of having a wonderful life.

Surely you want your life to be an example of what is possible.

So, choose to avoid living your life by default. Move toward something good, rather than move away from something painful. Just trying to avoid pain means you lack a plan.

Accept that your plans for the future are thoughtful and intelligent. Put a lot of careful consideration into your goals. Say to yourself, “My goals are perfect for me. My plans are in line with my values and beliefs. I know my life is getting better as I take steps to follow my plans.”

Schedule the necessary time each week to re-evaluate your progress and make adjustments to your plans based on that evaluation. If you keep tweaking your approach, success is yours. Success is your destiny.

At night, think about everything you did that day to put your plans into action. Then ask yourself how you can enhance your plan and the actions you are taking each day. Practice visualizing being successful and fall asleep in the knowledge that you are actively bettering your life.

Today, focus on your plans for the future. Believe that your renewed plans are congruent with your values. You are excited about what lies ahead because you make smart plans for your future.

Wrapping Up

Proper financial and retirement planning starts with goal setting, including short-, intermediate-, and long-term goals. Some key short-term financial goals include setting a budget, starting an emergency fund, and paying off debt. From there, you may want to start saving for things you want to buy or do in the relatively near future, and also start thinking about investing your money to help you build wealth over time.

Alright, so you probably won’t make perfect, linear progress toward achieving any of your goals, but the important thing is to be consistent. If you are hit with an unexpected car repair or medical bill one month and can’t contribute to your emergency fund but have to take money out of it instead, don’t beat yourself up.  That’s what the fund is there for. Just get back on track as soon as you can.

Undoubtedly, setting financial goals all starts with a budget. This is the foundation. It’s the plan. And it’s how you get intentional with your money. Check out SmartDollars and start your free budget today. Then get moving on those seven steps to setting and reaching your goals. No matter the time of the year, you can make these dreams into reality. Go get it!


Today, I plan to list my life goals. I want to consider my options and select those that I most want to accomplish. My life goals are the truest, most basic elements of the kind of life I want to live. When those goals are clear, my pathway to the life I dream of is paved. I strive to have clear life goals.

Self-Reflection Questions:

  1. What are my three most important goals?
  2. What are my plans for achieving those goals?
  3. How much time do I spend each day toward achieving those goals?
About The Author

About The Author

Ricardo is a successful Real Estate Investor, Entrepreneur and Blogger, with over 25 years of customer service experience. The bold & visionary founder of Funntripps and, he teaches busy entrepreneurs and bloggers how to successfully build and grow their business whilst having fun and living the maximized life. He enjoys spending time with his family, multi-family real estate investing and surprise get-a-way trips with his wife.

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The Productive Solopreneur

After spending most of my life believing that I was not enough, I realized that I needed to adopt a growth mindset as well as acquire all the skills and abilities I needed to thrive.  In this resource, I share how to create goals and the structure to work toward the ultimate work/life balance. I’m on a mission to change the world by helping aspiring entrepreneurs go from Side-Hustle to Boss. Steal my secrets to successful solopreneurship and living the maximized life. Learn more about it in my ebook/mini-course and receive a truckload of bonuses.

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