How to Set and Achieve Financial Goals

Financial security is a dream of many, but getting there requires much more than aspiration. Setting and achieving financial goals is a strategic process that can help you secure your future and enjoy peace of mind. In this guide, we will discuss some strategies for mastering your money and achieving financial freedom.

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Why Do Financial Goals Matter?

Before diving into the nitty gritty of setting financial goals, it’s important to discuss their importance to your ultimate dream of financial independence. Financial goals provide a roadmap for your future, helping you make informed decisions, track progress, and stay motivated. 

Without this roadmap, it’s all too easy to get distracted, to lose sight of the bigger picture. Breaking things up into smaller, manageable objectives that can be achieved over time is the best way to get to where you want to be in the end. 

Identify Your Priorities

Stop and consider what’s most important to you financially. Is it saving for retirement, buying a home, starting a business, or perhaps something else? According to a survey by USA Today Blueprint, a majority of respondents (55.70%) ranked saving for a rainy-day fund as their top financial goal for 2024. Other popular goals included saving for retirement and their children’s education.

Consider listing your priorities and ranking them in order of importance. This will help bring focus to what really matters. Think of your objectives in terms of:

• Short-Term Goals: Goals you want to achieve within the next year. Examples include building an emergency fund or paying off high-interest debt. 
• Medium-Term Goals: Goals that span one to five years. For example, saving for a down payment on a house or funding a big vacation.
• Long-Term Goals: Goals that will take five or more years to achieve, like retirement savings or college funds for your children. 

By thinking about the short and long term, you can get a better mental picture of what your future might look like. From there, it becomes much easier to strategize and create a financial roadmap.

Make Your Financial Goals SMART

To increase the likelihood that you will achieve your goals, make them SMART (Specific, Measurable, Achievable, Relevant, Time-Bound). For example, instead of saying, “I want to save money,” put it like this:

• Specific: “I want to save $5,000 for an emergency fund.”
• Measurable: “I plan to track my progress using X, Y, and Z tools.”
• Achievable: “I can make this goal a reality by cutting back on vacation spending.”
• Relevant: “Having an emergency fund will provide me with a financial buffer.”
• Time-Bound: “My deadline for saving this amount of money is 12 months.”

Making your goals SMART is a great way to hold yourself accountable. It forces you to really think about what you want and how you (realistically) plan on getting there.

Create a Budget

No matter where you are in life, having a solid budget is critical. This can help you understand where your money is going and identify areas where you may be able to cut back and save. Budgeting tools like You Need a Budget (YNAB) can be extremely helpful for tracking your income and expenses. 

Automate Your Savings

Automating your savings makes it easier to stick to your plan and budget. Set up automatic transfers from your checking account to your savings account. This ensures that you consistently save a portion of your income without having to think about it. Here are a few ways you can automate savings:

• Save money from every paycheck
• Use automatic savings tools
• Set up direct deposit
• Manage windfalls wisely

By getting in the habit of saving automatically, you can be well on your way to reaching your financial goals.

Invest Wisely

Investing is one of the best ways to grow your wealth over time. Creating a diversified portfolio can help spread risk and ensure a well-rounded investing strategy. To create a solid portfolio, start by defining your investment goals. 

Then, consider your risk tolerance. Some investors may be comfortable with higher risks and volatility, while others prefer to play it safe and grow their wealth at a slower, steadier pace. Evaluating your risk tolerance can help you determine which investments to include in your portfolio.

Once you’ve decided on the right investments, be sure to monitor and rebalance your portfolio as needed. The investments you start with aren’t likely to be exactly the same after several years or decades––even if you keep the same asset classes, they will change over time, so it’s important to invest wisely and consult with a financial expert if necessary.

Get Started Tackling Your Financial Goals Today

Achieving financial security doesn’t happen overnight––it takes a lot of time, planning, and trial and error. But when you get there, it will all be worth it. Whether your ultimate goal is to save enough for retirement, buy a home, or anything in between, you can reach your dreams with some strategic foresight. 

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PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All investments involve risk, including the loss of principal.