How To Actually Reach Your Financial Goals
Are you feeling overwhelmed by your money goals? Where do you even start? Setting financial goals can seem daunting to say the least. There are so many things you can be doing but the important thing is to just start.
I’m a strong believer in setting goals regularly. Every time I reach a goal, I end up setting a new one. It might seem never-ending at first, but as long as you celebrate each achievement, progress will turn into a habit.
So how many goals should you set? How often? How do you even keep track? Read on to find out a few methods that have worked for me in the past.
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Some examples of common financial goals
Everyone’s goals are different. You might be just getting out of college and trying to scrape up enough cash for a security deposit on an apartment. Or maybe you’re saving money for your kids college funds.
Money is an incredible tool when applied wisely and you can do this by setting financial goals.
Here are a few common money goals to get your brain going:
- Pay off credit cards – credit cards tend to have really high interest charges so this is a popular goal for most people. You might want to try switching to an all cash budget method to take control of your finances.
- Save for retirement – if you have an employee 401k match program, many set the goal of reaching that match percentage (i.e if your company will match your retirement contributions up to 6% many people aim to reach that contribution).
- Buy a house – Buying a house might seem like a huge investment, but you can actually purchase one for as little as 3.5% down. In fact, there are even zero down payment programs out there! (If you’re renting, this is what you need to do to get ready to buy a home)
- Buy a car – Maybe your car is breaking down and you’re wanting to buy another car. This is another popular savings goal!
- Pay off your student loans – 44 MILLION Americans have student loans. This is a money goal that might take longer to achieve but it is certainly a worthwhile goal.
10 tips on how to set financial goals
So now that you’ve come up with a few financial goals you’re interested in, how do you set them in an achievable but productive manner? These 10 ways should help you create goals that you can actually reach!
1. Start Small
Think of financial goals as a dieting or exercise plan. You wouldn’t expect to lose 50 pounds in one week would you? That’s impossible, not to mention unsustainable. You have to start small so you can feel like you’re progressing.
2. Don’t cut out things that make you happy
If that iced mocha makes you happy, don’t cut it out! That’s right. It might seem like a waste of money to some but if it’s truly a source of joy then it’s worth it. Perhaps there’s something else in your monthly budget that can be cut out or diminished. Maybe you’ll realize you don’t need both a Netflix and a Hulu subscription.
3. Create positive goals
Mindset is everything. Phrase your goals in a positive manner. Tell yourself that you’ll be spending more time reading this month instead of going out. Get excited about the local library and the plethora of FREE books it has. If you frame it as an adventure and something exciting rather than restrictive, it’ll become easier to accomplish.
4. Set SMART goals
Have you heard of the SMART system before? It’s designed to help you set and reach your goals. It can be applied to any life goals, including financial ones.
- Specific – An example of a specific goal would be to put money away for retirement every month.
- Measurable – How much will you actually contribute to retirement? For example, you will put $500 into a retirement account every month.
- Achievable -The goal you set has to be feasible. If you make $1500/mo then can you really save $500/mo after all your bills and expenses? Set a goal that is possible to achieve.
- Realistic – Just because a goal can be achievable, does it mean it’s realistic? How much will you struggle to achieve this goal? Will you have to cut out what truly makes you happy? It’s important to have a sustainable goal that you can form into a habit.
- Time bound – Have a deadline for your goal. In this case, you would put $500 into retirement by the last day of every month.
5. Write your goals down!
Whether you write them in the notes section of your phone, or in a journal you keep by your bed, writing your goals down will help you solidify them and keep track of them. You can even set reminders on your phone throughout the week so you can stay on track.
6. Create new habits
If you can manage to turn setting goals into a habit then it will become easier to incorporate them into your daily life.
7. Visualize the steps and the outcome
Have you made a vision board before? Well, it turns out it’s much more effective to visualize the actual steps and process in your journey than the outcome.
According to a study about preparing for a test, “Visualizing the process reduced their anxiety and this improved their performance.” But, that’s not to say that vision boards don’t work at all! Spend some time to envision both the steps and the outcome of your goals!
8. Reflect and revisit your goals
Make sure you’re keeping track and checking in with your goal plan regularly.
9. Don’t shame yourself but use positive reinforcement
You might not meet your goals the first time around. There’s nothing to be ashamed about! Evaluate where you went wrong and adjust for next time. Perhaps the goal you set wasn’t realistic and needs to be altered. Or maybe you just had a moment of weakness. Don’t beat yourself up and get right back to it!
10. Surround yourself with people who support your goals
Financial goals are also completely personal to you – maybe your friends are saving for a brand new Jeep but you’re just trying to pay off your credit card. Surrounding yourself with friends who openly talk about paying off their debt can help you. There are loads of people in the debt free community on Instagram that you can connect with (P.S are you following me yet?)