Do you have intentions of saving money but continuously feel like you’re not making progress or getting anywhere? Unless you start setting financial goals, you’ll likely continue to feel like you’re just spinning your wheels.
An important step toward becoming financially secure is setting short-term, midterm, and long-term financial goals, as you will likely spend more than you should if you aren’t working toward anything specific.
Setting financial goals starts with asking yourself a few questions. What is it exactly that you want to achieve? How long will it take? What are the steps to achieving it?
Once you’ve answered these questions, it’s important to figure out what is achievable in the short, mid-range, and long term, as well as develop a SMART (Specific, Measurable, Achievable, Relevant, and Timely) strategy.
This may seem intimidating, but with a partner like Voyage FCU, it’s achievable. In this blog, we’ll walk you through everything you need to know to conquer your financial goals.
What are financial goals?
A financial goal can be any plan you have for your money that you hope to achieve within an established period of time. Savings, investments, or spending targets are some of the most common financial goals individuals set for themselves. However, the stage of life you’re in can determine what type of goals you wish to set.
Financial goals can be short-term or long-term. For example, saving up for a vacation is a short-term goal, while investing for retirement is a long-term financial goal.
Your goals are there to keep you accountable and focused, no matter how long they take to achieve!
5 Important Steps to Setting and Achieving Your Goals
- Decide what’s most important to you. This can be anything from a practical and urgent item to a daydream bucket list idea.
- Write down your goals. Writing down your goals is critical to keeping you accountable. According to a study at Dominican University California, you are 42% more likely to achieve your goals if you write them down.
- Make sure your goals are established with a SMART strategy. This means making sure all goals are Specific, Measurable, Achievable, Relevant, and Timely.
- Create a realistic budget. Get a clear understanding of where your money is coming from and where it is being spent. Once this has been established, re-work the cash flow to align with your goals. Use your budget as a way to get ahead on finances by allocating dollars toward your goal.
- Monitor your progress. Make sure that you are regularly checking in with your goals and monitoring your progress to ensure you’re hitting certain benchmarks. If you are not hitting these benchmarks, set aside time to dissect your spending and re-evaluate what may have gone wrong.
Why Setting Financial Goals for Your Future is Important
One of the first steps towards setting and working towards your financial goals includes building financial literacy, as it equips you with the knowledge and skills required to effectively manage your money.
Financial literacy empowers you to make educated decisions and prepares you for the different financial stages of your life.
Once you understand your finances and the decisions that come with them, having financial goals will change how you look at your money. You’ll start to understand how every decision you make matters to your greater financial health.
On the contrary, if you don’t have financial goals, it’s no big deal to spend $5 for a Starbucks coffee every day. However, that adds up to $1,825 in a year. Think of what you could use that on instead! Small sacrifices like this help set yourself up to be financially secure.
It’s important to remember that the way you interact with your money today will impact your future.
Examples of financial goals
- Creating a budget
- Paying off credit card debt
- Saving an emergency fund
- Saving for retirement
- Building good credit
Get Started Saving
Saving for the future can be intimidating, but know that you’re not alone and there are unlimited resources available to help ease the burden of this. Remember that every person’s financial situation is different when it comes to budgets, debts, and saving so coming up with a plan specific to your needs is the most important thing you can do.
You likely won’t make perfect, linear progress toward achieving all of your goals, but the important thing is to be consistent. Unexpected expenses and bills are inevitable, so don’t beat yourself up over them. A new plan may be needed temporarily to get you through a difficult period, but you can always resume your original plan when you come out on the other side and get back on track.
The beauty and benefit of proactively planning your finances is that it allows you to monitor your progress towards your goals and make adjustments as needed. This can help you achieve your financial goals over the long term and recognize both the small things you do on a daily basis, as well as the larger things you do annually or over the decades that help you achieve your financial goals.
One step you can take today towards accomplishing your goals is to meet with a certified financial adviser, like Voyage’s Mark Ibis, who can help with your specific budgets, savings, and financial goals.