How to Set Financial Goals and Stick to Them

When it comes to your personal financial success, setting goals for your savings, debt, and budget is imperative; but, where many people run into an issue is accomplishing the goals they set out to complete. This can be frustrating because you can clearly see where you want to be, but making it actually happen presents with its own challenges.

If you need some help or guidance on how to set financial goals and stick to them, take a look at these helpful tips below.

Prioritize

When making your financial goals, it’s important to set them in accordance with urgency and priority. While it may sound appealing to begin saving for a home or a better car, you’ll want to consider if you have other, potentially more important, goals taken care of first. Some financial areas to consider while setting your priorities are:

• What is your debt situation like? How much debt do you have and how well are you affording your debt repayment?
• Do you have an emergency fund with 3 months worth of coverage built up yet?
• How healthy is your checking account? Do you find yourself living paycheck to paycheck each month?
• Have you started, or been regularly contributing to, a retirement account?

Be Realistic

If you’re not realistic with the goals you set, you’re just going to set yourself up for failure or disappointment when you don’t achieve them. For instance, if you are paying over $500 dollars a month in credit card debt repayments and are finding it difficult to make ends meet from month-to-month, it would not also be realistic for you to set a $500 per month savings goal. Instead, focusing on eliminating your credit card debt and freeing up some of your cash may make more sense.

Set a Timeline

When you’ve set your goals, it’s important to give yourself a timeline and deadlines on which to work off of. Open-ended goals will often not be reached, and you won’t have that satisfaction of completion of your goal. Make sure you set realistic timelines, as well. You don’t want to give yourself too little time, or on the opposite spectrum too much time; too much time will equal to lower accountability on your end and a lesser chance of accomplishing your goals.

Make Smaller Goals

Many times, the end goals we have are rather large, like saving for a down payment on a home or successfully funding your retirement account. When a set goal is too large, it can seem ominous and you may find yourself shying away from it altogether.

Try instead to break up your larger goals into smaller achievable goals. For instance, if you are saving for an emergency fund, this can take thousands of dollars; however, if you break it into chunks, like saving $500 and then saving another $500, the goal can all of a sudden seem more doable with the smaller milestones.

Budget for Your Goals

Whatever your financial goal may be, it’s important that you work the required dollar amount into your current budget and pay into it like you would a bill. Otherwise, you may have a hard time affording your goal or consistently working towards its accomplishment.

Celebrate Successes

Yes, celebrate. It’s so important to give yourself a pat on the back when you hit any of your goals or milestones. This is not saying that you should celebrate a $1000 savings by buying a $300 pair of shoes, but maybe treat yourself to a decadent dessert or a (not so humble) brag to your best friend. You should be proud of your financial successes.