Setting Financial Goals: Examples That Fuel Your Future

By Todd Kunsman

Saving Money

Published on

Updated on

Setting financial goals can prove to be difficult sometimes and even confusing. There are many moving parts to your personal finances and choosing what to do might not always be that obvious. 

And, everyone’s financial goals will also vary, because your situation will be different from the next person.

But as you look to improve your finances, you must create goals that you’ll want to stick with and create a plan to achieve them. 

There is a lot of different advice out there, what is one to do?

Below are examples of financial goals, the basics of setting goals, and tips to ensure you are successful.

Before Working On Your Financial Goals

Before we jump into specific financial goals, there are a few things to check off your list first. Ideally, these will help shape the goals you might have in mind or will help guide your decisions. 

Below are some things you should know before getting started: 

  • Understand How Much Money You Have – Look at how much cash you have. This can be between any savings accounts, checking, brokerage or retirement accounts, etc. 
  • Know Your Net Worth – Calculate your net worth, which is the value of all your assets minus any liabilities you have. If you don’t want to do the math, you can use Personal Capital which automatically does the work for you and helps keep you on track. 
  • Know Your Expenses – Just like knowing how much money you have, you should have a pretty exact number of your monthly expenses. This gives you the big picture and can help shape what financial goals you might want to focus on. 
  • Create A Budget – With the above information, start creating a simple budget calendar that can be used within your goals. You can use a spreadsheet or if you need more financial help, you can check out a platform like YNAB

What Are Financial Goals?

Financial goals are specific objectives or milestones that you set for your money over various time periods. These goals can be as simple as saving more money or saving up for a vacation. Remember your financial goals should be specific and can help better your current and future self.

Why financial goals are important

Financial goals are important as it helps give your money purpose but ensures it is going to work for you too. When you have various objectives for your financial health, it motivates you to take action, be strategic about your spending and helps you create a plan to achieve those goals.

You also want to be careful that your goals are clear and action-orientated. Meaning, wanting just to save money is too broad. Instead, a strong goal would be saving $10,000 in a year for my emergency fund.

Now you have a clear dollar amount, timeframe, and what this money is for — this updated goal is more detailed and direct.

Financial Goals

Basic Financial Goals To Start Today

While I will go more in-depth about specific financial goal creation further down, there are three key areas to start with.  

If you have not started on any of these three below, I recommend starting here as you move towards working on more specific goals.

But if you do have these three started or consistently being worked on, feel free to jump on to the next section. 

So what are the main three financial goals to start with?

  • Life Happens Fund
  • Paying Your Debt
  • Investing for Retirement

1. Life Happens Fund

Better known as your emergency fund (Not everything is exactly an “emergency” so I call it the “life happens” fund).

But, you should be saving money away for things that come up in everyday life, usually unexpected expenses.

These expenses could be household repairs, medical bills, job loss, or whatever the case may be. One of your first financial goals is to ensure you have this emergency fund stacked up to six months of expenses (or more). 

2. Paying Your Debt

Not everyone has debt and also the level of debt varies from person to person. While you can make it a goal to pay it all off as fast as possible, you should be paying your debt and have a good plan in place.

For me, it was knocking out my car loan and consistently paying my student loans. I made extra payments each month on all my loans, which saved me about two years of additional interest. Now I’m completely debt-free!

3. Investing for Retirement

Another basic goal you should begin doing is investing in your future retirement. That can be contributing to your company’s 401k plan or contributing to your own Roth IRA/Traditional IRA.

Of course, the more you can contribute early, the better. But just getting started as soon as possible is going to be beneficial. 

Set a plan for when you might want to retire and how much you need to invest. You can start out with a simple investing goal of maxing out your Roth IRA next year. Or it could be increasing my 401k contribution by 1% every six months.

Related: Looking for some investing help? Check out my post, Investing Money for Beginners: What You Need to Know First

Three Examples of Financial Goals

Once you have some of the basics of your personal finances organized and started, it’s time to start setting additional examples of financial goals. 

These three financial goals are based on different time-frames and serve various purposes.

Short-term financial goals

Short-term financial goals will typically be those objectives that are fairly easy and attainable within a quick period of time (6 -24 months). These short goals will be potentially smaller wins but can be financial confidence boosters that set you up for even bigger goals.

Examples of short-term financial goals:

  • Dedicating an hour or two each week to your budget
  • Paying off a specific debt, like credit cards
  • Saving money for an upcoming vacation

Medium-term financial goals

Medium or mid-term financial goals can be a bit more challenging but act as a nice bridge between your short-term and long-term goals. Typically, these actionable items would fall in the range of two years to five years.

Examples of mid-term financial goals:

  • Saving for a downpayment on a home
  • Paying off debt completely, like student loans
  • Having invested $100,000 in retirement accounts

Certainly, you could achieve these goals on the quicker side pending many factors, but these will have slightly longer timeframes.

Long-term financial goals

Long-term financial goals require much more planning and consistent effort to achieve. And these types of goals will not only take a while, but you might even run into challenges. Typically, these will take a minimum of five years but can go well past ten years.

I look at long-term goals as an important way to think about your future and your family’s future as well.

Examples of long-term financial goals:

  • Paying off your mortgage
  • Saving for a child’s education
  • Becoming a millionaire by X age
  • Building long-term wealth beyond being rich

Tips for Successfully Reaching Your Financial Goals

When you are creating your financial goals, you’ll probably have a good balance of the three examples listed above. Many times the real challenge is sticking to your goals, even if the goals don’t go exactly as planned. 

To ensure you stick with your financial goals, here are a few tips for success. You may have some additional things in mind to keep you on the right path, but hopefully these help you a bit too. 

Get inspired

The first thing you have to do is get inspired!

Maybe a bit corny, but without feeling inspiration or motivation, your financial goals will most likely be doomed from the start.

You need to think about what you want to do, why you want to do it, and how it can change your life. 

The inspiration for my financial goals was to have more travel freedom, less financial stress, and create financial stability. Those were enough to kick me into high gear, but you’ll need to find what pumps you up about your finances. 

Treat yourself when a goal is reached

Personal finance gurus and writers often discuss minimalism and frugality, but I find it important to still treat yourself. Meaning, you should not feel guilty about buying yourself things in moderation. 

Setting goals doesn’t have to feel like a chore nor should it be a tedious part of your life. Reward yourself for making progress and completing objectives. This can help you work harder and stay motivated to reach your next goals.

Focus on the steps, not just the end goal

When it comes to goal setting, a lot of times it is in our nature to focus on just the end goal. But the real priority needs to be on the steps and financial planning needed to actually achieve your goal(s) successfully.

Your goals require a plan, which is where writing down detailed steps becomes clutch.

For example, my one financial goal was to achieve a savings rate of over 60%. Underneath this goal, I wrote where I’m at now, what I can cut back, where I can pay myself more, and how I can make more money.

Each one of those steps had their own little action plan as well.

But that was key in ensuring I could achieve my goal not only in a timely manner but that I would successfully get there.

Goals are nothing without actionable steps.

Be realistic with your goal setting

There is certainly nothing wrong with an aggressive and challenging financial goal. It can make you work hard and motivate you to that next level.

But, you also want to set some realistic expectations when it comes to your money goals.

For example, one of my long-term financial goals is to become a millionaire in ten years. Challenging? You bet!

But based on my trajectory and current process with my finances, it is attainable. However, saying billionaire would not be that realistic and the odds are very slim.

I think having goals that might be more of a dream are okay to have, but ensure that the vast majority of your goals are more realistic to your situation.

Final Thoughts

It’s important to remember it’s okay if a goal is not reached in your exact timeframe.

Life happens, the economy fluctuates, and you can’t predict how goals will go that have longer timelines. But, you can be prepared and put an actionable plan in place with the above tips. 

Also, mistakes happen and good financial habits can be broken. The important aspect is to catch it and make sure you pivot back in the right direction. 

It might be frustrating at first if you are off track. But don’t let your frustration win because it will set you back from achieving your ultimate financial goals. 

Have you set up your financial goals recently? How do you go about ensuring you are on the right path? Let me know in the comments below.