Perhaps you’re feeling stuck in a rut when it comes to your finances. You may not know where to go or where to start. Read on to learn more about how to set personal financial goals you can stick to.
Vision Cast Your Future
This step can be kind of fun. Picture your life in the future and where you want to be.
Answer the following prompt when thinking about your future:
Where do you want your life to be in the next 10 years? Next 20 years? Write out what that looks like for you.
Now that you know what you want your life to look like, look into that further.
Take note of any themes that you see that could be money-related. Make sure that these themes you are seeing tie back to what your values are and what you want for your life.
Everyone’s financial goals will look different because what everyone wants for their life is different.
Write Down Your Financial Goals
Now that you have your vision for your future in your mind, you can start on your financial goals.
Write down any goal you have relating to money. Include the small ones, the big ones, short-term, long-term, far-fetched, and whimsy.
You want to capture anything at all that you might want to work towards. This will help you get an idea of where you want to go with your finances.
Rank Your Financial Goals in Order of Importance
Now that you have all of your financial goals written down, look through them all. Assess which ones are most pressing to you and which ones you want to work on based on your vision for your future.
Then, pick a few to focus on. It doesn’t have to be a specific number, just what works for you in your life. Personally, I would pick somewhere between 3-5 goals to focus on at any one time.
These are the goals that you will focus on as you create your budget.
‘SMART’ Goals
Once you have your top few goals narrowed down, re-evaluate them using the “SMART” goals criteria.
Apply the SMART methodology to each goal you want to focus on – specific, measurable, achievable, realistic, and time-bound.
You’ll want to make sure that each financial goal you set meetings the above criteria. If not, they may be too vague to focus on and therefore hard to do.
As you go through this step, take each goal and write it out listing each of the following criteria.
Here is an example:
Financial Goal 1: Save $300 for Christmas presents by December.
Specific: Is it specific? Yes – it shows how much, what it is for, and shows a timeframe.
Measurable: Can you measure it? Yes – it lists the dollar amount right in the goal. If you are several months out, you may want to break the $300 down into how much per month or per pay check you need to set aside to meet this goal.
Achievable: Is the goal achievable? That depends – if it is currently Thanksgiving and you don’t have a paycheck between now and Christmas, probably not. But, if it is the middle of September and you can afford to set aside $100 a month between now and December, then yes. You’ll have to evaluate whether it is achievable based on your own situation.
Realistic: Is it realistic? Again, this depends on your own circumstances. For some people the above goal might be far-fetched, for others, it might be easy to accomplish.
Time-Bound: Does this goal have a time frame in which it needs to be completed? Yes, it is noted that the goal needs to be accomplished by December.
Achieve Your Financial Goals
Here are some pointers to help you achieve your financial goals.
- Set deadlines or time frames in which you want to accomplish something. You may want to include milestones in between so you can check in on how you are doing.
- Regularly evaluate your financial goals. Could do it monthly, every 6 months, or annually depending on what your goals are and how often you want to revisit them. You may even need to re-evaluate your goals if your life situation changes and that is okay and good to do. You’ll want to make sure your goals are still attainable even if your circumstances change. Sometimes you may need to alter the goal by changing the amount or time frame to keep on track.
- Hold yourself accountable. This may mean that you need to share your goals with someone you trust. If someone else knows about your goals, you may be more likely to stick to achieving them.
- Create a chart. If you are a more visual person, you might want to create a chart to visually show how far along you are towards achieving your goals. It can be kind of exciting to see how you are moving along. You can keep the chart somewhere visible you can see it.
- Create a budget. Creating a budget you can stick to will help you achieve these goals. As you are working on your budget, your goals can be woven right into it so they can be achieved as part of how you are living your everyday life.
- Make sure your goals align with your life. You have to make sure that your goals are focused on your life and what you want out of it. If the goals are something you feel like you should be doing instead of what you actually want, they will be harder to stick to.
Examples of Financial Goals
While everyone’s financial goals will look different, you might like some examples of what a financial goal could be. Here are some very high-level goals to get you started.
- Create a budget you can stick to
- Save an emergency fund
- Pay off your debt (credit card, home loan, student loan etc)
- Save up for a new vehicle or a down payment on a house (or any other large purchase)
- Have a certain amount of money saved for retirement
- Help your children pay for college
- Save for a vacation
- Save up for a new television (or anything else cool you might want)
- Spend less
- Save more
- Improve your credit score
- Invest money
Create Your Financial Goals!
Now that you know how to set your financial goals, set out to do it!
A lot of times people think of money and financial goals in a negative light. However, if you align the goals with your dreams, wants, and needs, it can be kind of fun!
Good luck with your goals!
