How To Set Smart Financial Goals

Learning how to set smart financial goals is greatly influenced by our mindset!

Do you agree with this statement?You are exactly where you want to be. If you aren’t where you wanted to be, it’s because you need to shift your priorities.” However, you may say, “That’s not true, I don’t want to be in the situation I am in now!” In other words, are you being honest with yourself?

It is time to understand that until you explore and define what you truly want (and what you need to do to get it), you can’t make effective changes. Let’s explore how to set financial goals. After you’ve decided what is most important to you, you can set smart financial goals that will add value to your life.

Set Smart Financial Goals for Life

For instance, let’s make the time to write down your dreams. Dreams can seed your goals, but to achieve results, let’s add a deadline to your dreams. As a result, your dreams convert from “never-never land” to concrete life goals. By learning how to set financial goals, you are giving yourself guidelines or markers to keep you on the road to success.

A big goal can feel scary or overwhelming. When we fail to hit a big target, many of us stop trying. We tell ourselves- I am a failure. Stop! Don’t drown in self-judgment based on a snapshot of your life today. Re-evaluate your history and your potential for the future.

Keep in mind that preparing a detailed plan will create a more reliable financial results. Just as construction companies build immense skyscrapers one floor at a time, break down your financial goal into six, eight, or ten steps—and they are not always visible at first. The benefit of breaking down goals into baby steps creates a higher ratio for success, and it’s much easier to complete a smaller target.

Another advantage of planning ahead is the feeling of satisfaction and pride felt when we overcome challenges with a positive outcome. As a result of “winning” at several smaller goals, like saving $10 per week help you gain the confidence to tackle more robust commitments, like a mortgage.


First: Short-term Financial Goals

Let’s explore how to set smart financial goals for the near future. Short-term goals can be accomplished in the next week, month, or the next six months. Short term goals assist one in focusing on immediate priorities, provide clarity, and a habit of building consistency. Begin to nip procrastination or doubt with these easy tips for how to set financial goals.

Some examples of short-term goals include:
*This week I will set up a savings account and save $10 per paycheck
*I will set aside 15 minutes each day to set my priorities and journal
*I will download an app to manage my finances

As you get more confident hitting the smaller goals, you will more self assurance as you aim at medium range goals that take a few months or longer.


Setting Secondary Financial Goals

Next, we want to learn how to set smart financial goals for the next few years. Mid-term goals are an extension of some of your short term goals or are the beginnings of a bigger life goal. After setting these intentions, you may find that there are several smaller steps needed to complete your objectives.

Midterm goals could include:
*Now that I have a savings account, I will set up an auto-draft to create an emergency saving account to cover 3-6 months of living expenses
*I will meet with a professional financial planner to invest or grow my money
*I want to buy a jacuzzi, so I need to update the pluming in the house and lay down a concrete pad before I can purchase the hot tub.

In six months, with multiple positive outcomes, you are prepared to draft some ideas for how to set long-term financial goals. Dream it. Write it down. Do it!


Destination Goals

This where your financial GPS comes in handy. You know where you are, see where you want to be in ten years, or at retirement and have set financial goal or plan for going the distance! Here’s an innovative exercise for longterm goal-setting; write a letter to your 80-year old self, while looking forward and visualizing your life.

For instance, ask your future self, what goals did you set? What goals did you achieve? What are you most proud of accomplishing in your lifetime? Use the answers to those questions to define your goals and action steps from there.

Long term (or destination) goals might be:
*I want to own my own company
*I’d like to leave $500,000 for each of my children
*I plan to retire at 50, be healthy, and travel to five different countries.


How To Set Smart Financial Goals With A Budget

Choose one of the goals on your list and write out how budgeting
will help you realize that goal.

In conclusion, now that you know how to set financial goals, you are in the driver’s seat. You’ve stated what’s most important to you, you created the roadmap, and you have the power. Therefore, you can stop living paycheck to paycheck, and enjoy an abundant life that you created with intention. Want to learn more? Sign up for the newsletter and receive 3 Money Nerve worksheets to get started on your path to healthy money habits.