Setting Financial Goals

Setting Financial Goals

Financial goals let us see our path forward. Money is a doorway to our needs and desires. We use it to pay for our lifestyles and purchase what we want, but we often don’t think about what it means for our future. We’re told to live each day like it’s our last, but that doesn’t mean we should ignore the future.

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Financial goals are a way to prepare for the future. It could mean saving money for future living costs or for a purchase we can’t afford yet. Financial goals are goals we set that require money such as retirement, college, or a house.

Financial goals don’t have to be needs, and they don’t need to be expensive either. If there is anything you want or need and you can’t afford it now or don’t need it yet, setting a financial goal will give you something to work toward over time.

You can set any goal you want, but that doesn’t mean you’ll achieve it. If the right steps are taken, most goals can be achieved, but that doesn’t mean you’re able or willing to do what it takes. Sometimes a goal may be out of reach and unaffordable based on your income or the length of time you have to save.

For example, let’s say you want to retire at age 35. If you are 30 now, you will have 5 years until retirement. You will need to save a lot more money than if you waited until you were 65 to retire. You will have an extra 30 years to pay regular living expenses plus 30 years less time to earn and save money. If you’re only making $40,000 a year and you have nothing or very little saved yet, you won’t make your goal even with the biggest spending sacrifices.

If you invested the money you saved and had huge rates of return or started a wildly successful business in that time frame, maybe you could reach that goal. Can you do that? Do you want to try?


Set goals that you can achieve. If you aren’t sure if you can reach them, crunch the numbers using real data such as your income, expenses, goal requirements, etc. If you set goals that seem too difficult but you are willing to do what it takes to get there, go for it. It’s almost always worth a try.

Goals are not enough. There must be a plan for completion. A plan will make completing a goal easier and give you the steps to make it happen. Write down all your goals. Determine the amount of money you need for each goal and by what date you want to complete each one. Divide up the savings goals by the number of months you have until the completion date.

Use a calculator that takes inflation, raises, and investment opportunities into account.

How much do you need to save each month total to complete your goals? Is it far above what you can afford each month? Is it within your means? Adjust your goals however you need to. It may mean cutting some out completely, cutting down on others, pushing back the completion dates, or finding other sources of income.

That is the beauty of the planning process. There is no guessing. If you set up a plan for a reasonable goal and follow it, your goals should come to fruition. Consider paying yourself first.