Examples Of Financial Goals To Level Up Your Money Plans
Today, I’d like to share a definitive guide to financial goals.
Complete with financial goals examples. Also, what are financial goals? How to set them? And why you should.
Let’s dive right in. Here is a complete list of financial goals to consider for your financial planning & money management efforts.
39 Examples Of Financial Goals
- Assess your current money state
- Establish a money space
- Put the right insurance in place
- Improve your credit score
- Establish an emergency fund
- Establish a monthly budget
- Reduce expenses and save money
- Refinance your debt
- Reduce or eliminate non-mortgage debt
- Contribute to your employer-sponsored retirement plan
- Sign up for a direct paycheck deposit
- Automate credit card payments to your bank account
- Automate all recurring bill payments
- Put all account login pages in a favorites folder in your web browser
- Go paperless
- Create an efficient means to store passwords
- Negotiate a pay increase
- Get a higher paying job
- Start a side hustle
- Declutter and sell your stuff for cash
- Rent out a room in your home
- Rent out your vacation home
- Buy a rental property
- Save for something you value
- Sock some money away for something fun
- Save for a down payment on a home
- Buy a home
- Invest in yourself
- Read a personal finance or investing book
- Invest money every month
- Open and Fund an IRA account
- Open and fund a health savings account
- Find a money mentor
- Monitor your money
- Create a plan for your money
- Become financially independent
- Become a millionaire
- Create your end of life documents
- Set financial goals
We will dig into each one of these a little later. First of all, I know it’s a lot. But don’t get overwhelmed.
Just consider this list of financial goals a menu. To choose from as you see fit.
Disclosure: At no cost to you, I may get commissions for purchases made through links in this post.
An Analogy About Developing Financial Goals
Just like when you go to a restaurant. You don’t order everything off the menu.
No, you pick what suits your taste. An appetizer, entrée, and a dessert.
Do the same for your financial goals. Pick a few goals to achieve in the short-term. Also, a couple of medium-term and long-term financial goals examples from the menu.
But there’s more. Because once you have made your selections. You need to set your goals effectively. Here’s how…
How To Set Financial Goals – Make Them SMART
I suggest SMART financial goals.
SMART is an acronym. So when you are setting financial goals you want them to be:
More on SMART financial goal setting a little later. And how to achieve your financial goals after you pick them and set them.
But first, let’s step back and understand a couple of important concepts about financial goals. Then we will tackle that big list of financial goals examples.
What Are Financial Goals?
First of all, a goal is the desired outcome that a person envisions, plans, and commits to achieve. Furthermore, a financial goal is an outcome that you want to accomplish in an area of your finances.
Good financial goals are person-specific. Because we are all different. And we all have different goals.
That is why I have provided a menu of goals to choose from. So anyone reading this article can find 1 or more examples of financial goals. That fit their unique situation.
Don’t Confuse Financial Goals With Good Money Habits
I find that many people confuse good money habits with personal financial goals. Let’s clarify this. So we don’t make the same mistake.
First of all, a money habit is a behavior related to your finances that is performed regularly. And, repeated over an extended period.
Furthermore, money habits are a way of thinking, feeling, or doing something. That is acquired through previous experience.
I would like to use an example to better explain…
Let’s say my friend Maria wants to get a 10% raise from her boss. And she feels by getting up early and starting work every day by 7 am, a 10% raise will follow. That is when she comes up for a salary review next year.
Getting up early and starting work at 7 am is a habit. By our definition, it is a behavior performed regularly over an extended period.
On the other hand, Maria’s short-term financial goal is to get a 10% raise. It is the desired outcome. The result she wants to accomplish for her finances.
So, think of this way. Practicing good money habits will help you achieve your financial goals. But please, don’t confuse your money habits with those goals.
Habits are repeated behaviors. While goals are a specific outcomes.
Why Are Financial Goals Important?
Goals are a critical element to improve your odds for success with money. Why is that? Let me explain.
First of all, setting financial goals will prompt you to establish new money-related behaviors. Think of Maria. She wants a 10% raise. So she established a new behavior. Getting up early and starting work at 7 am.
Furthermore, goals guide your focus. Let’s face it. Life can be cluttered. We are pulled in many directions by many different people. And there are so many distractions.
Therefore, smart financial goals provide a framework for making everyday decisions. Once again let’s go back to our example using Maria.
Maria has lots of friends. And they love to go out and party it up every night. Of course, they want Maria to join them.
But given her goal to get a 10% raise. And, her newly established habit of starting work at 7 am. It’s easy for Maria to say no.
Going out late every night with her friends doesn’t fit with her financial goal. So, she decides to only go out with her friends on Saturday night. Her goal has kept her from making a bad financial decision.
To summarize, I can’t emphasize enough the importance of setting financial goals. Goals break down your money aspirations into attainable chunks. Also, start you on a path to achievement.
I like the saying “How Do You Eat an Elephant?” And the answer is “One Bite at a Time.”
And so it is the same with goal-setting. You will improve your success with money by pursuing that success one goal at a time.
Next, let’s discuss the different types of goals. It is important to understand each type before beginning your financial goal-setting process.
What Are The 3 Types Of Financial Goals?
The 3 types are.
- Short-term financial goals
- Medium-term financial goals
- Long-term financial goals
Let’s discuss and define each one.
Short-Term Financial Goals
A short-term financial goal is something you want to complete soon. Most noteworthy, I define this as up to 1 year from the date you set the goal. These goals are great for your finances in your 20s and 30s.
And there are several aspects to short-term goals that we want to understand.
First of all, completing short-term financial goals becomes your foundation for long-term success. Furthermore, achieving short-term financial goals gives us the motivation to keep moving forward. They provide us with an incentive from “quick-wins”.
Financial goals for college students should first focus on the short-term. Then move to longer-term thinking.
Finally, thinking about short-term goals makes us mindful of our money every day. It’s all about intentional living. Spending money on what you value. And, living in the moment.
After all, today is all we have. Tomorrow isn’t promised. But it must be planned for.
There are lots of examples of short-term financial goals. We will get to those in a moment. But first, let’s discuss and define medium-term financial goals.
Medium-Term Financial Goals
Medium-term financial goals require us to stretch out our thinking. And allow us to plan for important life events in the not too distant future. They are also sometimes referred to as intermediate-term financial goals.
What is the time frame for a medium-term financial goal? Look to accomplish intermediate financial goals in more than 1 year, but less than 5 years.
Long-Term Financial Goals
Finally, we have long-term financial goals. The goals we want to accomplish in more than 5 years. Achieving long-term financial goals examples leads to a big-time compounding effect on your wealth.
Now, let’s think about the 3 types of financial goals holistically. Most noteworthy, we want to think of our short, medium, and long-term goals together. Why is that?
Because longer-term goals will influence your medium-term and short-term financial goals. I think of this as the “big picture” in overall financial goal planning.
And 1 more point on the different types of financial milestones. As I said earlier, financial goals are specific to each individual. And so are the different types of goals.
For example, a 20-year-old may set a long-term financial goal to save for a down payment on a house. But for a 30-year-old, that may be a medium-term financial goal.
You get the idea. Everyone is different. When it comes to choosing financial goals.
And, when determining which type of financial goal it is. Short term, medium term, or long term. Regardless, I have several good long-term financial goals examples in the list that follow.
So, let’s go through each of the examples of financial goals. The ones I offered up at the beginning of the article. This will give you some background on each of them.
Examples of Financial Goals
Make An Honest Assessment Of Your Current Money State
Get your financial facts together. What is your net worth? How much money do you spend and where do you spend it.
Do you have investments? Then, what are they and are they the right investments for your stage in life.
So, set a goal to get familiar with your finances. And do that work in a dedicated money space.
Establish A Money Space
Have a dedicated space where you think about your business metrics, career, side hustle, money, and investments. This is typically a home office.
I’ve had a desk and home office space since my early 20’s. When I was living in a studio apartment.
It has always been a place where I keep all financial documents. And my computer, personal finance tips, and resources such as books, and investment newsletters.
Currently, I use a spare bedroom for my home office. It’s my money space.
Maybe you should have a money space too? Doing so comes from the practice of Feng Shui for wealth and money luck.
Put The Right Insurance In Place
A major accident can cripple your finances and create big financial problems. Whether that accident is health-related or property related.
Not carrying the right insurance in the proper amounts is a huge financial risk. Insurance is a must when considering your short-term financial goals.
On the other hand, remember not to over-insure. Insurance agents love to sell insurance. So be smart about it.
Here is a simple rule of thumb. Insure only what you can’t afford to lose.
That means having enough insurance on big-ticket items. Like your vehicles and homes. Also, your life, if others are financially dependent on you.
Besides, having appropriate medical insurance is a must. Health care services can be very expensive. And sink your financial ship very fast.
So, think about this financial goal example very carefully. Be sure to carry the right amount of insurance.
Then bid out your insurance every year or two. This way you are more likely to get a lower rate.
Because most insurance companies will increase their rates annually. For home, auto, health, and life insurance each year.
Resource: Get an affordable life insurance policy
Improve Your Credit Score
Your credit score is important. So, consider setting a financial goal to improve it.
A good credit score can mean the difference in several areas. Getting a loan, being able to use a credit card, or getting a job offer from a prospective employer.
So be sure to protect your credit score, check it regularly, and make it go higher.
Resource: Check your credit score for free
Establish An Emergency Fund
Another one of our good financial goals is to build an emergency fund. Why? You know, stuff happens.
People lose their jobs without notice. Health issues can come up and accidents occur. Also, cars breakdown and can need costly repairs. These are just a few examples of when an emergency fund can come in handy.
One rule of thumb is to save 3-6 months of living expenses. Set this money aside in a risk-free high-interest savings account. Then, don’t touch that money unless you have an emergency.
Resource: High-interest online savings accounts
Establish A Monthly Budget
Having a budget is very important. If you don’t have one, it should be one of your short-term financial goals.
It doesn’t have to be complicated. Pencil and paper will suffice. A spreadsheet or free online software is okay too.
When preparing your budget, expenses should be no more than income. Look for ways to create excess cash where income exceeds expenses by as much as possible.
You might not believe it, but research shows that most millionaires keep a budget. That’s right, budgeting is helpful, even for millionaires.
So they know how much money is coming in. And where that money is going.
Reduce Expenses And Save Money
Now, I will be the first to tell you that it’s difficult to scrimp and save your way to money success. It takes more than just saving money.
But, living below your means and saving money is important. It is an essential element when trying to set and achieve financial goals.
Think about your spending on the following 4 big-ticket items. Then consider how you can reduce your costs and save money.
Here are the big-spending categories that will likely pop out of your budget as areas to save money:
- Find more affordable housing in a lower-cost location
- Reduce automobile and transportation expenses
- Watch out for food and beverage costs especially when dining out
- Keep your costs for leisure activities reasonable
So consider a monthly amount to reduce your expenses. As part of setting your short-term financial goals. Doing so will increase your available cash flow. Which can then be used to achieve other goals.
Think about it this way when financial goal setting. Can you reduce expenses by 5% or even 10%? If so, you will be glad you did.
Refinance Your Debt
Here’s a way to help achieve that financial goal of reducing expenses. That is refinancing your debt.
Interest rates are historically low. So, reduce interest costs by refinancing your debt to save money.
Do you have a mortgage on your home? That’s the first place I would look to refinance.
Do you have other loans or credit card debts? Consolidate and refinance them under a home equity line of credit. Or another type of loan consolidation program.
Resource: Refinance your debt at Lending Tree
Reduce Or Eliminate Non-Mortgage Debt
We just talked about the benefits of refinancing your mortgage. Another good short, medium, or long-term financial goal is debt payoff. And to not take on any new debt.
And the first debt to pay off is high-interest debt. That being your credit cards.
Interest rates on credit card debt are very high. There is no better use for your excess cash than paying off your credit card bills. Paying off your credit card debt as fast as you can is a great example of a short-term financial goal.
Then go after your automobile loan. If you have one.
Next up is student loan debt. The average interest rate on student loan debt is about 6%. This isn’t too bad.
But I suggest you pay off your student loan debt after your credit cards. And after paying off your auto loan.
Everyone’s debt situation is different. The rule of thumb is easy to remember. Pay off the highest interest debt first. Then move onto the next highest.
Finally, most people will put paying off their mortgage in the category of long-term financial goals examples. This is generally a goal to complete before you retire.
Contribute To Your Employer-Sponsored Retirement Plan
Most employers sponsor qualified retirement accounts. They are also known as 401(k) or 403(b) plans for US residents.
These plans offer several advantages. First, your money can be invested before any taxes are taken out.
For example, let’s say you invest $10 and you are in the 22% tax bracket. That means you save $2.20 in taxes.
So the $10 investment costs you only $7.80 out of your pocket. This is a great way to stretch your investment dollars while trying to achieve your financial goals.
Furthermore, your money grows without being taxed. Until you take withdrawals in retirement.
This puts more of your money to work each year. Since you do not have to pay taxes on any of your investment gains or dividend income.
Finally, most employers will contribute to your retirement account. It is called a company match.
So, make sure you participate at the minimum level in your company’s retirement plan to maximize their matching contribution. This is part of your compensation package. Don’t waste it.
So, if you are not participating in your employer’s 401k. Then doing so should find its way into your short-term financial goals. Otherwise, you are making a big financial mistake.
Sign Up For Direct Deposit
Now you are earning a paycheck. And, making contributions to your company-sponsored retirement plan.
Of course, those dreaded taxes are also being deducted. But what is left over is yours to spend on your needs and wants.
But, it’s a good idea to get your pay as fast as possible. So set up the balance from your paycheck to automatically and directly deposit into your bank account.
Don’t mess around with a paper paycheck. Your human resources department should be able to help you with the appropriate paperwork.
This is an easy short-term financial goal if you haven’t already done it. Put this on your list of financial goals. Get it done and experience a “quick win” to gain momentum.
Automate Credit Card Payments To Your Bank Account
Here’s another opportunity to make your financial life more efficient. And this is important. Never, ever miss a credit card payment by setting them to auto pay from your bank account.
The fees credit card companies charge for missed payments are ridiculous. So, go into your credit card accounts online. And put in your bank account information.
Then, select the credit card account option to have your balance paid in full automatically each month. Through a direct charge to your bank.
Automate All Recurring Bill Payments
Now we have one big recurring monthly bill taken care of. And never have to worry about paying on time.
But we have other monthly bills to deal with. Here’s what comes to mind for most people:
- Mortgage or rent
- Car payments
- Student loans
- Electric bill
- Gas bill
- Water bill
So, here’s another good short-term financial goal. Take the time to set every one of your recurring bills to auto-pay directly from your checking account.
Never worry about missing a payment and incurring late charges. Never hassle with writing checks.
Go online to each of your loan and service provider accounts. Put in your banking information and have the balance paid in full each month.
Put All Account Login Pages In A Favorites Folder In Your Web Browser
Most people have several online accounts to look after. So, set all of your online account access pages up in a favorite’s folder in your web browser. You should have a favorite for the following online account access pages:
- Bank accounts
- Credit card accounts
- All service and load providers that bill monthly
- Company-sponsored 401(k)
- Investment company account
Let’s say you have about 10 favorites set up for your account access pages. Now that you have easy online access. Seriously consider this next example of a short-term financial goal…
Go into each of your accounts and set them up for paperless billing and paperless account statements. If you ever need that information, get it online.
You do not need those bills and statements coming to your mailbox through snail mail. One less thing to worry about!
Create An Efficient Means To Store Passwords
All of these online accounts will require a user ID and password.
So, document your user IDs and passwords. Store them in a safe place with any other passwords you need to keep track of.
We have covered a lot of ground already. The last several were related to simplifying and streamlining your personal finance operations.
Simplifying and automating financial tasks are excellent examples of short-term financial goals. Once done, they free up your time for more important activities.
Such as increasing your income. Let’s talk about that area now.
Negotiate A Pay Increase
Ask your employer for a raise. If the answer is no, ask what you need to do to get one.
How does your performance have to improve? What additional responsibilities do you need to take on?
This is a good financial goal for your 30s. Because your skills have increased. And your compensation may not be keeping up.
Get A Higher Paying Job
Make sure you are getting paid market value for your skills. If your current employer won’t pay market value, then look for a new employer that will.
Because the best businesses set goals to motivate employees. And this includes financial and non-financial rewards.
On the other hand, sometimes changing employers is the quickest way to make more money.
Whatever you decide to do with your job or career, think about this. Figure out what you are good at. Then, be great at it.
Resource: Improve your resume with MyPerfectResume
Start A Side Hustle
The list of possible side hustles is endless these days. The internet has matched people with goods and services to sell. With those that are willing to pay for them.
My in-laws started a hobby farm. Other people walk dogs.
You can drive for Uber. Start a blog. Create an e-book or product for sale. You name it.
Maybe your side hustle will turn into a business? With a formal plan and it’s own set of business financial goals.
Declutter And Sell Your Stuff For Cash
Look around your home for things of value that you no longer use and that can be sold. Check eBay or niche sites to see if there is market value.
A few years ago I sold off some audio equipment and bicycles for hundreds of dollars.
Rent Out A Room In Your Home
Renting out a room in your home doesn’t require you to make any extra investment. And can bring in extra cash.
Their are services like Airbnb. They make it easy to connect with interested renters.
And you can make a significant income. Depending on the size and condition of your place along with the location.
Rent Out Your Vacation Home
Are you lucky enough to own a vacation property in an attractive area in a beautiful state? If yes, make a financial goal to rent it out when you are not using it.
Buy a Rental Property
Beyond renting out a room in your own home, or renting out your vacation home. You can also invest in a rental property. This separates your investment from your life.
Of course, take your time to find the right location. And it will take some time to make this big investment. So this may be more of a long-term financial goal. Compared to renting out a single room.
If you need a place to stay, you can also buy a rental property and keep a room for yourself. For example, in a three-bedroom apartment, you can live in a single room while making a lot of money from the rest of the place.
Or perhaps, having multiple rentals is an option. Many people do this as a side business.
But, be careful. It’s a big responsibility. And financial commitment.
So, think through this option completely. And make a business plan as a short-term goal.
Save For Something You Value
Another possible financial goal is to save money for something you value. What you value is unique.
So, it’s hard for me to guess. But, here’s an example.
Maybe there is that “special someone” in your life. Do you need to save up for an engagement ring? Or any other type of meaningful gift?
Then set a financial goal. And do it!
Save For Something Fun
Want to take a vacation soon. Or, a trip to see an old friend from the past?
Then put some money aside. And gather positive energy by thinking about the trip coming up in the future.
Save For A Down Payment On A Home
Buying a home or condo in an area you desire can be a good financial goal. But first, you must save for a down payment.
Then that down payment becomes equity in your real estate. After you make your purchase.
Rather than paying rent, your mortgage payments increase your equity ownership in your home each month. And hopefully, the value of your home appreciates over the long run too.
Buy A Home
But perhaps you have been saving. And have that down payment on a home ready to go.
Then pull the trigger. Set a financial goal to find and move to your dream home in your desired location. And make the purchase.
Be careful here. Owning your residence can be expensive. Repairs, renovations, association fees all add up. And if you have to sell, real estate commissions will take a chunk out of your equity.
Invest In Yourself
The best investment you can make is in yourself. Understand what you can dominate to make a good living. Find out what you are good at. Then, put in the time and effort to be great at that skill.
Take advantage of every training opportunity you have access to. What options does your employer offer? Either on the job training or more formal continuing education are both beneficial.
The best thing about learning on the job is it has no out of pocket cost to you. It is one way to achieve a financial goal without spending money.
Every year, you should have at least one goal to improve yourself. Over the long run, doing so will increase your income-producing capabilities.
Read A Personal Finance Or Investing Book
You can’t go wrong learning more about personal finance. Or, investing.
So pick a book on a finance topic of your choice. And, set a financial goal to read it front to back.
Looking for an inspiring money book to read? Try Everyday Millionaires by Chris Hogan.
It’s full of examples. About how people like you and I came from nothing to become millionaires.
Here is another one of my favorite money books. The Minimum Wage Millionaire was written by a gentleman named Bill Edgar.
This book is for teenagers. That’s right, teenagers.
Now chances are you are not a teenager. But that’s okay.
Minimum wage millionaire is full of great advice. The book’s advice is for anyone that would like to manage their money better. And have more money.
Read it yourself. Or give it to that special teenager in your life.
Invest Money Every Month
Choose an amount you will invest each month. And make automatic deposits of money from your checking account into your brokerage account or savings account.
Automating monthly investments is a great way to invest in small amounts. And, take advantage of dollar-cost averaging.
You can choose to invest in financial assets that produce income. Interest and dividends are some of the most passive income you can have.
Open a brokerage account, if you don’t have one. And invest in stocks.
Online brokerage accounts are free and easy to open. M1 Finance and Webull are both excellent options.
Resource: Invest in stocks using the Webull app
I like dividend growth stocks. But, if you are not up to picking stocks, go for a low-cost exchange-traded-fund (ETF).
Open and Fund An IRA Account
Opening and funding an IRA is an excellent intermediate financial goal. But you need to know, there are two types of IRAs.
There is a tax-deductible IRA. This type of IRA works similarly to your company’s retirement plan. Specifically, contributions are made pre-tax.
Then there is a Roth IRA. In the case of a Roth, your contributions are made after-tax.
But you never have to pay another penny of tax after that. Even when you take withdrawals in retirement.
In the case of both accounts, your money grows without being taxed. Throughout your pre-retirement years.
Resource: Open your IRA account
Open And Fund A Health Savings Account
First of all, stay fit. And take care of yourself. But there are more ways to maximize your spending on health care.
Do you have a high deductible health insurance plan? Many employers and insurance companies offer them.
A high deductible health insurance plan has a couple of advantages. First, the monthly premiums on these plans are lower. So, you can save money upfront. Second, you can open and fund a Health Savings Account (HSA).
Like a 401(k) or deductible IRA, you invest money in this account pre-tax. And, your money grows without being taxed thereafter.
Finally, withdraw the money for qualified health care expenses. And it is never taxed!
Find A Money Mentor
I have had countless mentors over the years. In many different areas of my life. They have been invaluable to my success.
What I am saying, is that I identified people that I liked and respected. They had experience in areas where I did not.
So, I talked to them, observed them, and listened to them. And sometimes I emulated them.
Just look around and be aware. There are potential mentors everywhere. They do not have to be formal mentoring arrangements.
So find a mentor who has had success with money. A parent, family member, or close friend may be the best option. As long as they have achieved some level of success with their money.
Ask them questions and see what you can learn. Most people are happy to talk about what they have accomplished. And how they went about it.
Monitor Your Money
Set a financial goal to monitor your money every month. Keep an eye on things.
By looking at the current state of your financial affairs, new financial goals will start to become obvious to you.
Resource: Monitor your money with Personal Capital
Create a Plan For Your Money
A money plan is more than just a budget. A budget gives you the information to expand upon your financial plan.
Your budget is a useful tool in setting other financial priorities. And, allows you to make a plan for every extra dollar you can create, over and above your expenses.
Letting money sit idle is an example of poor financial management. Here is a pecking order of what to do with extra cash.
- Top off your emergency fund
- Payoff debt
Can you start to see how these examples of financial goals are related? By monitoring your money monthly, you will become aware of financial opportunities.
This leads to a bigger picture money plan. In turn, that plan brings to light financial goals you can and should set.
Become Financially Independent
Ready to leave the 9-5 grind? Then set a goal to become financially independent by living off investments and your other financial resources.
Financial independence money and timing is different for every person. It depends on your annual expenses. And the lifestyle you choose to lead.
Some people declare financial independence at a young age. Because they live an extremely frugal lifestyle. Others pursue retirement at a more typical age.
But if achieving financial independence is different for everyone, our next goal is not. And, I have to say the next goal is one of my favorite examples of long-term financial goals.
Become A Millionaire
Set your goal to become a millionaire. A millionaire is a person (or household) with a net worth greater than 1 million dollars.
Net worth represents a person’s assets minus their liabilities. In other words, net worth is described as “what you own minus what you owe.”
Then a millionaire is an individual or household that has accumulated at least 1 million dollars net worth. They have likely achieved this by setting and accomplishing many of the long-term financial goals examples we have been discussing.
Create End Of Life Documents
It’s never too early to start thinking about the inevitable. As they say, there are only 2 guarantees in life: death and taxes.
Most legal experts suggest getting these basic documents in place.
- Last will and testament
- Power of attorney for financial matters
- Power of attorney for health care
There are more advanced methods of estate planning too. But these are the basics everyone should have in place. So get them done.
Set Financial Goals
I’m going to end with what should be obvious by now. Maybe it even seems a little silly for me to bring this up. But I have to include it on the list.
You can make a goal to set financial goals! And I think you should.
Okay. Take a deep breath. Because that concludes our review of a wide range of personal financial goals examples.
As I said, consider this a menu of options. To think about and integrate 1 or more into your overall financial planning, as you see fit.
But there’s more. Next, I want to go back and talk more about setting your financial goals. I touched on this topic early on.
Setting Financial Goals: Make Them SMART
After you choose 1 or more financial goals, they need to be set effectively. I suggest the SMART system for setting financial goals.
Each of your goals should have the following attributes.
Next, I want to define these attributes for you.
Make Your Financial Goals Specific
The first step in making a SMART financial goal is to make it specific.
Answer these questions about your goals:
- Exactly what is to be accomplished?
- Who needs to be involved?
- Why is it important to achieve the goal?
Do not become concerned about being too detailed. The more details about the goal that you can document, the better. Because you will become more clear on exactly what you want to achieve.
Your Financial Goals Must Be Measurable
Make your financial goals in life measurable. To do so, answer this: what information are you going to use to measure your progress in route to the goal. And measure whether the goal has been achieved?
Fortunately, financial goals tend to be easy to measure. So, make yours measurable.
Each Financial Goal Should BeAchievable
We want to stretch ourselves. And make challenging financial goals. The types of goals that will improve our finances in big ways.
On the other hand, there is no need to set a goal if it can’t be achieved. By being specific, step 1, you will come to understand whether the goal is achievable.
Financial Goals Are Realistic
A realistic goal has 2 attributes. First of all, the goal should make sense for your current financial situation. Furthermore, make sure you have the resources to achieve the goal.
Here’s an example. Becoming a billionaire may be an achievable long-term financial goal.
After all, it has been done. Bill Gates and Warren Buffet have done it.
You might say if Bill and Warren can become billionaires, it’s an achievable financial goal So, you can do it too!
Now, I would admire your positive thinking. But I would argue that for most of us, becoming a billionaire is not realistic.
Becoming a billionaire is not a relevant goal. So don’t waste your time.
Make Your Financial Goals Time-Bound
You must set a date to achieve your goal. First of all, having a deadline will increase your sense of urgency. Furthermore, a time constraint will increase your odds for success.
Finally, are multiple steps involved to achieve the goal? Then an end date allows you to work backward. To make sure each intermediate step can be completed to support the timing of the end goal.
Okay. That wraps up a brief review of goal setting. Make your goals SMART. And you will have a better chance to achieve them.
But, there is one more thing I want you to do. As part of setting your financial goals.
Put Your Goals In Writing
Now, take what you have from setting your SMART financial goals. And write it down, if you have not already done so.
Documenting your financial goals is very important. The act of putting financial goals in writing builds your commitment. And helps to clarify your thoughts.
But that brings me to the next important question. Are there other things that should be done to ensure the achievement of your financial goals? The answer is yes.
How To Achieve Financial Goals?
I think of achieving goals in 3 steps. Those steps are:
Create a written action plan. A detailed step by step plan may not be necessary. It depends on the type of financial goal, and the complexity of the financial goal.
On the other hand, a challenging long-term financial goal probably requires a step-by-step plan. An action plan is nothing more than the detailed steps required to achieve your goal. Once again, just like creating a SMART financial goal, put your action plan in writing.
Next, it’s time to act. And work your action plan.
Also, think about what new habits you need to create in your life. Then set the right daily, weekly, and monthly actions to support the attainment of your goal. Make those actions a habit.
Monitor your progress. Since you used the SMART financial goal-setting process. Your goal is measurable. And it is time-bound. So, measure your progress as often as necessary.
That’s all for today. We have covered a ton of information. So now it’s time to get to work. And start setting and achieving your financial goals.
Here is a summary of what we covered.
Examples of Financial Goals & How To Set Yours: A Complete Guide
To select, set, and achieve success with money. Here is your financial goals checklist:
- Understand the 3 types of financial goals: short, medium, and long term.
- Choose 1 or more financial goals from the list of financial goals provided
- Set your financial goal(s) using the SMART process
- Achieve your financial goals(s) by planning, acting, and monitoring progress
Now, I’m motivated to start setting and achieving my financial goals. I hope you are too!
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Disclosure & Disclaimer: I am not a licensed investment adviser, financial adviser, or tax professional. And I am not providing you with individual investment advice, financial guidance, or tax counsel. Furthermore, this website’s only purpose is information & entertainment. And we are not liable for any losses suffered by any party because of information published on this blog.