Can you succeed in life without setting financial goals?
I think not.
Without financial goals you have no plan for your money.
Without a plan for your money you have no direction.
Without direction you will spend without thought or focus.
Goal setting is crucial in many aspects of your life, whether that’s life goals, career goals or financial goals.
Today I am focusing on financial goals. Because your money and your plan for it impacts on all aspects of your life both now and in the future.
Financial goals can be short term, mid term and long term.
For me the key to thinking about and creating your goals is to aim high.
When you stretch your aspirations to do more with your money, you will achieve more. I love this quote:
“Whether you think you can, or think you can’t, you are right” – Henry Ford
Your thinking can limit your achievements. Always believe you can.
Because you can!
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Why Have Goals?
Financial goals give you a target to focus on over the months or even years.
They give you a sense of direction, keep you on the straight and narrow when temptation rears its head.
Knowing your goals helps you focus your spending on what you value.
When you value your goals and what life will be like once you have achieved them, then that value will trump buying pizza on Friday night because you felt like it.
Always Be SMART Goals
Make them SMART – I personally detest this acronym because my employers over use it, in situations that can’t always be SMART.
But ignore me, SMART is good (when used the right way).
Used in the right context, SMART really helps you define what you want and when you want it by. SMART means:
- Specific
- Measurable
- Achievable
- Realistic
- Time-based
Your financial goals must mean something to you to make them real. They need to be a specific thing, not just “save more money”.
That’s a weak goal asking not to be achieved.
Whereas if you were to set yourself a short term financial goal of saving $3,000 dollars in 12 months, that could be SMART.
It’s specific, measurable and time-based.
Only you and your budget will know if it’s achievable and realistic.
If you create unrealistic goals – and it’s so easy to do – then when you fail them, because they are unrealistic, you are reinforcing a negative.
That you are crap with money.
You are not, but you might need to work on getting better at creating financial goals!
ACTION – Think about where you want to be next year, in 5 years or even 20 years time. What do you want to have achieved financially?
Key Actions
When you create your financial goals you also need to think and be clear about what the key actions are for those goals.
Key actions are the steps you will take in order to achieve your goals.
Using the above goal of saving $3,000 in 12 months, what key actions can we create to ensure we achieve our goal?
How about:
- Reduce grocery budget by $60 a month
- Reduce utility bills by $10 a month
- Cut your clothes budget by $50 a month
- Earn $100 a month extra
- Have one takeout a month less, saving $30
Each month you will know if you are on track to achieving your financial goals by checking how you did on your key actions.
Your key actions help you stay focused on your goals.
You know why you have a smaller clothes budget and everyone month you will remember that why.
10 Of The Best Financial Goals You Should Have
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Live On Less Than You Earn
To achieve any of your goals you need to live below your means.
When you always live on less it means you have money left over for your future, savings, retirement and paying off debt.
Use the 30 day rule to limit impulse spending.
Want to know what rich people do? They always live below their means!
Living within your means protects you from the curve balls that life throws at you.
As someone who has been frugal for a long time I cannot recommend enough the long term financial goal of always living on less than you earn.
Living a frugal life gives you peace of mind and money in the bank. Check these frugal posts out for more inspiration:
How To Be Frugal in 2019: 155+ Best Frugal Living Tips To Try Today
The Best Books On Frugal Living You Need To Read
18 Fundamental Items In My Frugal Home You Need To Have
Educate Yourself Financially
If understanding debt, 401k’s, ISA’s, investing, shares and pensions are not your thing right now, then resolve to change that.
Information is power!
When you know the right information you can make and informed choice.
There are plenty of books that are aimed at beginners that won’t frazzle your mind.
My top 3 books to start your financial education are:
Dave Ramsey’s Total Money Makeover Edition
Related post: The Best Books On Frugal Living You Need To Read
Pay Yourself First
Your future self needs you to save some money now, so you can spend it later. As in many years later.
You do not want to be reliant on social security nor do you want to have to work until you are in your 70’s.
Do your future self a favor, start saving for you today. Create a clear goal to set aside a set amount every payday without fail.
Create A Financial Plan
When you set yourself mid term and long-term financial goals you are effectively building a strategy for your money.
But it’s only part done for those goals.
Finish your strategy by creating a financial plan for the rest of your money. A key part of your financial plan is your budget.
A budget helps you make your money work for you. It guides your spending, helps you know what you can spend your money on and when you need to stop.
These posts on budgeting will help:
How To Live Fabulously On A Budget (And Save Money)
How To Budget And Save Money Like A Frugal Ninja
Pay Off Bad Debts
Credit card debts and high interest loans all impact your ability to live your life and spend your money today.
They can take up a huge chunk of your paycheck.
So make it your goals to get rid of these debts once and for all.
Oh, and don’t add more debt as you pay the old ones off – just saying!
Related posts: How To Pay Off Debt Fast And Still Have A Life
A Debt Story And 21 Things You Can Do To Become Debt Free
Don’t Finance Anything
Make it your mission this year to not take out credit for any purchases. Save up and pay in cash/on your debit card.
If you don’t have the cash, don’t buy until you do.
Declutter Your Finances
Get your finances organized and in tip top shape. Be determined to reduce your expenses so you are paying the best rate on every bill.
Negotiate with existing providers or switch to another company who can provide the same service for less.
There is no customer loyalty reward from companies. In fact they often reward new customers and hike rates for existing customers.
Review your insurances to make sure you are paying for the right level of cover. Remember when you renew to always search the market.
Check out all the tips in this post: Cut Your Budget With Tips From The Experts
Always Buy Used
When you buy used rather than brand new, you can save yourself thousands. Never buy a brand new car, you lose money driving it off the forecourt.
But I’m not just talking cars, you probably already have that sorted. I’m talking tools, toys, clothes, decor and anything else.
We live in a society where many people buy new and chuck out their old on a regular basis.
Be different, buy things used via online websites like Facebook, Craigslist and Ebay. Check out your local thrift stores, charity shops and yard sales.
Top tip – Check thrift shops in prosperous areas.
My local charity shops aren’t great but 10 miles up the road is an expensive market town where the charity shops stock some fabulous bargains and quality brands.
Build Your Emergency Fund
If you don’t already have one then please set this as one of your priority short term financial goals. Aim for $1000 to start with.
Once you have achieved that, then aim for 3-6 months of your survival budget.
Having this amount of money will give you peace of mind and stop you worrying about money and the what-ifs of losing your job or having a health scare.
These posts will help: How To Kickstart Your Rainy Day Fund When You Are Broke
Emergency Fund Examples: 23 (Unexpected) Reasons Why You Need One
Have A No Spend Challenge Or Two
A no spend challenge is a short term financial goal where you literally freeze spending on anything other than essentials.
What I like about no spend challenges is that they help you to press pause on your spending.
It gives you pause for thought on what you spend money on and why. A brilliant goal to reset your money habits and focus on all your savings goals.
You can start small with a no spend days challenge and work your way up to a week, a month or longer.
Spend Time Outdoors
It might not seem like a money goal but it is in its own way.
Spending time outdoors has many health benefits which will help your finances in the long term.
Time off sick costs money as does medication. Spending time outdoors is also a free activity.
You can spend days without spending any money when you go camping and hiking.
Why not commit to getting outside on a hike or a bike every week for 3 months?
The Secret Tip To Achieving Your Financial goals
As important as taking the time to think about your goals, is to write. them. down.
Writing down your goals commits them to memory and to paper.
When you write out your commitment to yourself you are much more likely to achieve those goals, however long term they may be.
This post explains the importance of writing down goals, have a read to get inspired with creating and writing down your own thoughts.
So please, once you have created your money plan, write down those financial goals of yours, keep it somewhere visible.
And get cracking on making them become a reality!
Last Updated on 14th July 2020 by Emma
