How to Set & Achieve Your Financial Goals

Have you made a plan for your money this year and beyond? At any stage of life, you can establish some financial goals to suit your particular situation. Taking the time now to evaluate your personal finances and set tangible, measurable goals for your money is the best way to prepare for a secure financial future—whether that is three years from now or 30 years from now.

What are Financial Goals?

Financial goals are milestones you want to achieve with your money. Like a budget, financial goals can help you take stock of what you have to manage your income and spending better. Unlike a budget, financial goals are focused on future objectives rather than day-to-day money management. Ideally, the two should go together.

Setting Your Financial Goals in 6 Steps

Ready to get started? These tried-and-true steps for setting financial goals can help you organize your thoughts and guide you through the goal-setting process.

1. Assess your financial situation.

Start by taking a thorough look at your finances. Review your income, tax situation, budget, and net worth. This step gives you a baseline from which you can better determine and prioritize your goals—and more clearly see how your life and money connect.

2. Write down your goals.

Take your time with this step and think carefully about what you want to accomplish, both now and in the future. Do not worry if you can only think of a few goals at first. This can be a living document that you update regularly and alter as often as needed, depending on what’s happening in your life. You can use our or create your own—whatever works best for you.

3. Separate your goals into short-, medium-, and long-term.

Once you have jotted down your financial goals, separate them by estimated time needed to achieve them. For example, a short-term goal could be saving money for unexpectedly high quarterly tax payments after realizing capital gains on market strength over the last few years.  A medium-term goal could be to spend money on part or all of a major house project, and a long-term goal could be to retire at age 65 with enough money to live a comfortable life and consider generational wealth transfer goals. This timeline approach will help you keep your goals in perspective and prevent you from feeling overwhelmed by everything you want to accomplish.

4. Set target dates.

Start setting dates for your goals. Be as specific as possible, particularly for your short-term objectives. Specific dates give you a concrete deadline to work toward, even if you need to adjust them later.

5. Make them measurable.

Measure your goals along the way by setting checkpoints. For example, if you have set a short-term financial goal to save $25,000 for quarterly estimated tax payments, schedule a mid-month checkpoint for each of the three months to ensure you are staying on track.

6. Monitor your progress.

Check in on your financial goals regularly and adjust them as needed. As with many worthwhile goals, attaining them is a marathon, not a sprint. The process will almost certainly come with detours and adjustments to your chosen route, and that is perfectly fine. Your job is to stay the course, even if that involves some changes along the way.

7 Common Financial Goals

Although everyone’s financial situation is unique, there are several key goals that all generations share.  Let’s take a look at the most widespread and common financial goals.

1. Finetuning the Budget

Pruning a carefully planned budget can provide room for the growth you want to achieve.  A budget can help you clarify exactly how much money you have to work with—as well as pinpoint areas of spending—so you can where and how much you might reallocate funds. As your income and assets grow, for instance, the 50/30/20 budget you started with may change to allocate 50% of your take-home pay each month to “needs,” 20% to “wants,” and 30% to savings.

2. Maintaining an emergency fund.

Unplanned expenses happen to everyone, which is why building and maintaining an emergency savings account is a fairly universal financial goal. Whether you’re faced with an essential house repair, a sudden job loss, or a medical emergency, having funds set aside to help manage the costs and prevent you from going into (or adding to) debt can make all the difference.

3. Paying down debt.

Whether you have high-interest-rate credit card debt, medical bills, or pricey student loans, debt can hold you back from the things you want in life and hinder your path to achieving your other financial goals. Fortunately, there are a number of time-tested ways to tackle debt—e.g., the debt snowball and debt avalanche methods—that can help you regain control and even become debt-free. When choosing an approach, make sure it’s one you are likely to stick to based on your motivations and how much you owe.

4. Saving and investing for retirement.

Saving for a comfortable retirement is one of the most common long-term financial goals, and it pays to save early and often. Consider your tax situation too, when investing for your future. Contributions to both IRAs and 401k plans are tax-deductible (the former depending on your income), but you will pay income tax on the withdrawals you make in retirement. Roth IRAs don’t offer any tax breaks upfront; instead, they allow your money to grow tax-free, and there is no tax due on withdrawals at retirement.

If you have a 401(k) or other retirement plans at work, take advantage of any employer match—free money—by contributing the maximum amount you can. And if your employer does not offer a retirement plan (many small businesses still don’t), talk to a financial adviser about opening an IRA.

 5. Buying a home.

Purchasing a home is another common financial goal and can be one of the most daunting. When considering your options, remember that most homebuyers need to save for a sizable down payment to qualify for a reasonable home loan. Though you may often hear that a 20% down payment is the benchmark goal, many Americans are getting their foot in the door (literally) with lower down payments of around 10 percent to 15 percent, or even less, though all-cash offers can be the norm in certain regions and cities. Still, much like retirement, the earlier you start saving for this goal, the better.

6. Paying for kids’ college.

This is one more long-term goal that typically requires a very early start. It is common knowledge that college is prohibitively expensive, which is why many parents start building a college fund (e.g., 529 Plan) while their kids are still infants. Even if you can only currently afford $50 a month, start saving for your kids’ education now if this is one of your key money goals. Even with the assistance of grandparents, scholarships, and student loans, it is still important to tuck away as much as you can, as early as you can.

7. Protecting your credit score.

Your financial goals will be much more achievable if you have good credit. If your score is less than 670, you will likely only qualify for credit cards and loans with high-interest rates. To improve your credit, make sure to pay all your bills on time. Paying your bills in full each month will raise your score more quickly, but even minimum payments will help improve your credit over time. In addition, try to keep your credit usage low, keep old accounts open, check your credit report for any errors (disputing any that you find), and monitor your score regularly. Building up credit and improving your credit score over time is crucial to many financial purchases (e.g. buying a home for the first time) and in some instances can greatly reduce the cost of financing.

Why is it Important to Set Financial Goals?

Setting financial goals is the key to building wealth and doing so can give you a framework for the future. Making a prioritized list of your goals challenges you to thoroughly consider what you really want to achieve with your money, when you want to achieve it, and what steps you will need to take to make it happen. Visualizing hopes and expectations are the launchpad of your personal financial plan, and goal setting helps you get there with positive progress and accountable actions.

No matter what you hope to achieve, setting and monitoring your financial goals now is the best way to help you and your loved ones look forward to the financial future you envision.


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