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Oct 20, 2023

Setting Financial Goals for Your Future

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Are you trying to set up a budget that works? Looking to invest your income for the first time? Developing your big-picture financial plan? Whenever you’re making money decisions, financial goals can guide you.

Financial goals are your personal saving, spending, and investing targets. They might be things you want to achieve in the short term, a bit further down the road, or even far into the future. Goals help you determine how to allocate your income among expenses, how much to save and invest, and what success looks like. Your financial goals will be as unique as you are. Determining them can help you understand and achieve the financial future you want.

In this article, we’ll discuss:

How to determine your financial goals 

How you build your money strategy is largely driven by your financial goals. When you know what you’re working toward, you can more easily make financial decisions that support your values and ambitions. Most people have multiple short, mid, and long-term goals at any given time. 

The financial goals you set will be driven by things like your lifestyle, plans for the future, where you live, family structure, and so on. They’re also contingent on your financial situation, including income, expenses, and debt. Rather than comparing yourself to other people, focus on working toward achievements that are realistic and meaningful for you. 

Keep in mind that your goals will likely shift over your lifetime as your circumstances change. For example, changes in income, family dynamics, health, and even the economy can directly impact your goals. 

The 3 types of financial goals

You can break your goals into three broad categories based on timeline, and you might take a different approach for goals in each category differently.

  • Short-term financial goals: These are smaller financial targets that can be reached within roughly a year. In addition to saving over time, many people fund these goals with a one-time windfall like a tax return or bonus. 
  • Mid-term financial goals: Mid-term goals are typically larger goals that will take one to five years to achieve. Having a longer timeline allows you to put your savings into an interest-bearing account or short-term investment to help your money grow. 
  • Long-term financial goals: These goals will take more than five years to achieve, are higher financial targets, and will require a long-term commitment to saving and investing on a regular basis.

Examples of financial goals

So, what are the financial goals you should set? The answer to that question is unique to every individual, and it’s based on both practical considerations like age and income as well as personal hopes and desires. For most people, it makes sense to set a couple of short, mid, and long-term goals at the beginning of their financial planning journey. Then, you can check in on your goals periodically to make sure they still make sense for your overall financial plan. The examples of financial goals below can help you start thinking about the goals that make sense for your life. 

Short-term financial goal examplesMid-term financial goal examplesLong-term financial goal examples
Paying off credit card debtPutting a down payment on a houseSaving for retirement
Building an emergency fundBuying a new carPaying off your mortgage
Saving for a vacationSaving for your educationSaving for your children’s education
Paying for a weddingPaying off student loansRemodeling your home
Replacing a computer or applianceMoving across the countryCaring for aging relatives

Why financial goals matter

Delayed gratification can make saving and investing hard. You have to give up spending in the short term for gratification down the road. That’s why setting goals is so important. It gives you something to work toward that makes resisting the urge to spend your money worth it. Financial goals provide purpose and energize your money moves so you can work toward the future of your dreams.

Goals also make your financial planning concrete. You’re not just saving miscellaneous sums of money for a vague future use. You have a savings plan in place to achieve something that will bring you joy or comfort. And you know exactly how much you’re trying to save.

How to set financial goals you can stick to

Your financial goals need to be realistic and motivating in order to work. So you must consider several factors when setting your goals, including your current income, expenses, and debts, as well as the life you want to live. Here are six tips for setting financial goals you can achieve. 

1. Make your goals specific and measurable

Start by making a list of goals, categorized into short, mid, and long-term. Determine the required amount and ideal timeline for each goal. The more specific you are, the more effective your financial planning can be. For example, if you want to replace your old car, research the kinds of vehicles you might want to buy and how much they cost, and consider when you’ll need to make the purchase based on how much life is left in your current car.

2. Build savings into your budget

Having a budget not only helps you manage your day-to-day spending but also enables you to plan for the future. Once you understand how much money you have left over at the end of the month after core expenses and bills, you can assign a chunk of every paycheck to each goal. You may be unable to save for everything at once, so you’ll want to prioritize. Start with your financial security goals, like an emergency fund and paying down debt, and work out from there. Once you feel financially stable, you can pivot to saving for more fun milestones alongside your very long-term goals, like retirement.

3. Establish an emergency fund

Building an emergency fund is often one of the first financial goals people work toward. That’s because having the money you need to cover an emergency can protect your other goals. An emergency fund exists so that unexpected expenses like a leaky water heater, car repairs, or medical bills don’t have to come out of your house fund or long-term savings. Experts recommend having three to six month’s worth of living expenses in your emergency fund. Once you hit that mark, you might want to focus your savings efforts on other goals, but be sure to replenish your emergency fund any time you have to spend some of it. 

4. Understand your timeline

Goals work better with a deadline. If they aren’t time-sensitive, it’s too easy to procrastinate. But if you set unrealistic deadlines, like saving up $5,000 in two months, you’ll likely never be able to achieve them. So it’s important to understand when you need the money for a goal and how much time you have to save it up. For instance, say you want to pay off $12,000 of student loan debt in one year. You’d need to spend $1,000 a month, plus interest, on those payments. If there’s no room in your budget for that, adjust your timeline to reflect what’s reasonable for your income. You might also have goals with set-in-stone deadlines, like the deposit on a new apartment when your lease is up. Work backward from that date to figure out how much money you have to save each month to have enough. 

5. Set realistic amounts

It’s one thing to dream big, but turning those dreams into reality means getting real. For each of your goals, calculate how much money you’ll actually need. For instance, say you want to put a down payment on a house in five years. Do some research to find out how much money you’ll actually need for the kind of house and location you want. If the amount is more than you can save up in that timeframe, make adjustments based on your personal priorities; you might decide to look in a cheaper area, go for a condo instead, or tighten your budget so you can put more money into savings.  

6. Revisit your goals regularly

You don’t want to set and forget your financial goals. Check in quarterly or a couple of times a year to update your goals based on shifts in income, plans, lifestyle, or new opportunities. For example, you may have been saving to buy a new car in three years, but wind up moving to a city with great public transportation, so you decide to shift your savings to a different priority. Similarly, as you achieve your goals, you can continue to add new ones, so you’re always working toward something. You have the freedom to adjust your financial goals to fit your ever-changing needs. 

The role financial goals play in your big-picture plan

Financial goals don’t have to be limited to things you want to save up for. Goals are part of an overarching financial plan that charts your current and future fiscal landscape. In addition to savings goals, you might work toward other financial goals like:  

Take control of your future with your financial goals

You don’t have to map out your entire future to start setting and achieving financial goals. You can start small: maybe for now you stash aside money for a weekend road trip next summer, start paying a bit more toward your credit card balance, and contribute a bit of each paycheck to your 401(k). As you get more confident with your budget and check some goals off your list, you can think bigger and plan further out. When you set specific, realistic goals, you’ll be equipped to take control over your finances now and over the long haul. 

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Written by

Sarah Spagnolo

Sarah Spagnolo serves as Managing Editor, Head of Brand at Stash, the investing app that helps people achieve their financial goals. As Managing Editor, Sarah oversees all personal finance content and brand experiences, ranging from partnerships to influencer marketing and webinars, and is the editor of the Stash 100, Stash’s annual collection of the best money tips for hardworking Americans. She has two decades of experience working in brand, communications, and content for companies across media, tech, travel, design, and finance. Over the course of her career, she has appeared as an on-air expert in outlets including The Today Show, Good Morning America, CNN, MSNBC, Dr. Oz, the Weather Channel, Cheddar, and many local news channels, and has been quoted in Axios, The Information, CoinDesk, the Wall Street Journal, and dozens more. A graduate of Syracuse University, she lives in Brooklyn with her husband and family.


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