Financial Goals for a Richer Life
Celebrate every step and milestone along the way to achieving your financial goal.
When you think about your future, you likely have goals that you’re trying to achieve. These could be personal like getting promoted at work or making time to meditate each morning. Or they could be financial, like paying off your student loans or buying a house.
Setting financial goals for yourself may help you improve your financial wellness and live life to the fullest without needing to constantly check your bank account. That said, not all financial goals are created equal, and some may take longer to achieve than others.
Not sure where to start? Let’s go over some common financial goals and how you could prioritize them in your life.
Your financial goals should be tailored to your unique needs, wants, and hopes for the future
Your goals may change over time, so revisiting them and making sure they still align with your future plans is a must.
Monitoring your progress and celebrating milestones could help you stay motivated to achieve your goals.
What Are Financial Goals?
Financial goals are intentions that you set around your spending, saving, investing, and any other aspect of your money management. They’re something you work toward over time and may help keep your finances on track.
When setting financial goals, aim for clear, measurable, and most importantly, trackable. The easier it is to monitor your progress, the easier it may be to stay motivated.
Setting goals may not seem like a huge priority when you’re trying to balance everything else in your life, but doing so may have benefits beyond your account balance, such as lowering your stress levels, creating healthy financial habits, and growing your wealth over time.¹
Short vs Mid vs Long Term Goals
There are three main buckets that financial goals fall into: short-term, mid-term, and long-term. There’s no one-size-fits-all approach to these goals, but most people choose to have one or two in each timeframe.
Before we get into examples, let’s define these goal types.
Short-term Financial Goals: Tend to take anywhere from a few weeks to a year to achieve. Most of these focus on financial planning like building savings for a specific purpose or tracking your income and expenses to improve your overall financial health.
Mid-term Financial Goals: Typically take between one and five years to achieve. These goals are designed to help you achieve financial stability while still focusing on growth. That growth could be anything from building knowledge about finances or investing, to building your assets.
Long-term Financial Goals: These goals often take five or more years to achieve and focus on preparing for the future. Common goals in this category include saving for retirement or paying off large loans, like a mortgage.²
We should note that some general goals, like building a savings strategy, could fit into all three buckets. For example, your savings strategy may include building a rainy day fund in the short term, saving for the down payment on a house in the mid-term and growing your retirement savings in the long-term.
Financial Goal Examples
Your financial goals should work to help you better your situation and may be different to the ones your family or friends have set. If you’re not sure where to start, here are some common goals:³
Track Income and Expenses: Depending on how you look at this goal, it could fall into any of the time frames. Some people may choose to carefully track their expenses for a fixed period while working toward a savings or debt reduction goal. Tracking also makes sense long term to help you continually maximize your income and potentially achieve greater financial security.
Paying off Credit Card Debt: This short-term goal lets you focus on paying down your credit card balances until you no longer carry a balance on your cards. Getting out of debt may save you money on interest and could free up funds for other purposes.
Building a Rainy Day or Emergency Fund: Setting funds aside to cover a leaking appliance or broken-down car is a common short-term goal that may save you from a headache down the road.
Saving for a Vacation: Everyone has a list of dream destinations and bucket-list trips. Creating a travel fund may make these trips a reality sooner. You may place this goal in the short or mid-term bucket, depending on the overall price tag and when you plan to go.
Saving for a Down Payment: Saving money for a down payment may take a few years, making it a great mid-term goal to set if you’re looking to exit the rental market.
Saving for Retirement: Saving for retirement is an important long-term goal, whether you have an
employer-sponsored 401(k) or plan on opening an IRA. Keep in mind that this goal may change over time, and you should revisit it on a regular basis.
These are just a few of the most common financial goals you could incorporate into your personal finance strategy. If you still have questions about goals that would work for you, it’s a good idea to consult with a financial advisor.
How to Set and Achieve Financial Goals
Every situation is unique and that means you should tailor your financial goals to meet your needs.
Let’s take a closer look at how to set goals that are achievable and keep you motivated as you go.
Tips for Prioritizing Your Goals
The biggest challenge most people face is prioritizing their financial goals. Here are a few tips to help you out:⁴
Specify What You Want to Achieve. Make your goals super clear so you know the exact target you’re shooting for. For example, instead of setting a generic goal of “save more”, consider making the goal “save $5,000 by the end of the year”. This makes the goal measurable and gives you a timeframe. If you are setting goals with a partner, take time to discuss your individual and combined goals.
Balance Urgency and Long-Term Planning. Consider each goal and how it fits with your broader financial picture. Some goals, like building an emergency fund, may be urgent. While others, like saving for retirement, are important but have a longer time frame. It’s important to prioritize more urgent goals first. However, considering this example, also factor in the impact of time. Retirement savings require time to build up—even though retirement may be years away, the earlier you start, the more you may earn. All in all, it’s a delicate balance and you may want to contact a financial advisor to help you navigate the decision.
Be Mindful of Overlap. You may pursue more than one goal at a time, but it’s important to strategize your efforts. Consider breaking them up in order of importance. For example, say you’re saving for a vacation in two months and want to have a down payment for a new car in the next year. Since the vacation is sooner, it makes sense to put more aside for that goal first and wait to save for the down payment when your trip is over. Of course, if your old car starts to make strange noises, you may choose to fly economy on that vacation!
Review Your Budget. Regularly check in on your goal contributions and how those contributions impact other goals and expenses. Remember, you want to make sure contributions to your goals aren’t causing you to come up short when covering your expenses.
Tips for Achieving Your Goals
Setting goals is one thing. But achieving them is something else altogether. Here are a few tips that may help you achieve the goals you set:⁵
Make Them Achievable. While it might be tempting to set goals that feel like a true reach, don’t set every goal to top difficulty. Instead, set goals that you’re reasonably able to accomplish and consider breaking larger goals into smaller tasks or milestones.
Track Progress: It’s always easier to stay motivated when you see how much you’ve achieved. Get in the habit of tracking progress for each goal you set and celebrate when you reach different milestones.
Leave Room for Adjustments: Setbacks and roadblocks may pop up from time to time. Don’t let those setbacks derail your determination. Try to have a plan on hand for any obstacles you hit or give yourself space to reset your goals after you encounter a setback.
Reassess Your Goals: Life is never static and that means you may need to adjust your goals. Give yourself permission to make changes when necessary.
Setting financial goals may help you stay motivated to make smart money moves that impact your financial well-being in the long run.
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