Now is the perfect time to create money goals for the new year.
For many years I would set goals for myself that didn’t include my finances. I’d have a goal to lose weight, read books, and even learn a new skill, but I’d neglect to have the same fervor around my money.
Perhaps that’s why my finances never seemed to improve…
The first money goal that I actually set was to get out of debt by age 30. I recited my money goal mantra every day: “Debt-free by 30.” It wasn’t until I actually accomplished this goal that I realized how important it is to have very clear financial goals.
When you take the time to actually think about the things that you want to accomplish and create a plan to get there, you’re far more likely to achieve them. That’s why it’s so important to create financial goals.
It’s not just enough to say that you want to be rich or successful. You have to create a plan and strategy to get there.
I get that money can be an overwhelming topic, so in this post, I’ll provide some examples of money goals that you can adopt this year. I’ll also share the exact steps that you’ll need to take to achieve those goals!
Before we begin, let me define exactly what money goals are and why they’re so important…
What are money goals?
Money goals are those things that you want to accomplish in your finances. Another way to put it would be financial goals.
It literally can be anything–from getting out of debt to investing in real estate. It’s simply what you want to be able to do with your money.
Money goals are no different than any other goals. Like any other goal, they will guide your decisions and give you something to work toward. You should be in constant pursuit of achieving a goal.
You’ll quickly realize that money actually impacts other areas of your life and, ultimately, other goals that you may want to accomplish. So if you can get your money right, you can achieve much more in life.
Financial goals are typically categorized in three different ways. You have short-term, mid-term, and long term financial goals.
Short term financial goals are things that you want to accomplish within 12 months. Consider these to be things that are easily attainable, like getting on a budget. Mid-term goals are things that you want to accomplish in 1-3 years. Lastly, long term goals are those financial goals that you want to achieve within more than 3 years.
Why should you set financial goals?
It’s important to set financial goals because they serve as a guide for how you manage your money.
For instance, if your goal is to save money and you’re committed to it, you won’t waste money on things that you don’t need. In a sense, it drives positive behavior change.
Furthermore, your finances shouldn’t be left to chance. So you want to set goals so that you know exactly what you’re working toward and how you’re going to achieve it.
15 Financial Goals Examples
Not sure what money goals to set for the year? Here are some examples of financial goals that you can adopt for yourself.
1. Create a financial plan
A financial plan isn’t just reserved for those with financial advisers or tons of money. A financial plan is for everyone. It is a document that details how you plan to reach your financial goals.
Your plan takes everything about your life into account, including your marital status, career goals and more! It’s ultimately your guide for accomplishing any of the subsequent goals that I’ll mention.
The great thing is that you don’t need a financial advisor to create a financial plan. You can come up with your own financial plan leveraging the same financial planning process as the professionals.
Your financial plan should always begin by answering the question, “What do I want my life to look like X years from now?” Once you’re clear on that, you can create a roadmap for your finances to support that lifestyle.
2. Save for emergencies
Saving for emergencies should be at the top of your list for things that you want to accomplish with your money. Having money set aside for unexpected events helps protect you from a financial crisis.
Your emergency fund should not only cover the cost of an unexpected emergency, but it should be able to cover your expenses in the event of a temporary halt in income.
Most financial experts recommend that you have the equivalent to at least 3-6 months worth of expenses in a savings account for emergencies.
If that seems overwhelming, just start with saving $500 then $1,000 for emergencies. Having something set aside to help in a bind is better than nothing.
3. Stick to a budget
The best way to manage your money is with a budget. That’s why sticking to a monthly budget or a paycheck budget should be a financial goal that you work to accomplish.
The word budget can seem limiting to most people. But, as I like to say, “a budget is a tool and not a trap.” It’s designed to help you plan where your money will go and to also track your spending.
If you have a history of not sticking to your budget, there are a few budgeting tools you can use to help.
- Budget spreadsheets – A budget spreadsheet allows you to manage your money from anywhere! This is critical for sticking to your budget. You can budget from your computer, phone, or even a tablet and it will all sync together.
- Budget printables – You’re much more likely to remember something that you write down. Much like the budget spreadsheet, printable budgets help you plan out your spending and track your expenses throughout the month. The only difference is you’re grabbing pen and paper to do so.
- Cash envelopes – Cash envelopes are a great way to help you stay within your budget. Traditional envelopes can be used to separate out cash that’s designated for different line items in your budget. Digital cash envelopes do the same except you’re able to use your debit card to make purchases.
Commit to review your budget the same time each week so that you stay on top of it. When it comes to budgeting, the old adage is true: Out of sight, out of mind. So schedule regular “budget review meetings” with yourself or your spouse.
4. Pay off debt
Becoming debt-free is one of the best things that I’ve ever done in life. It opened up my finances to experience life the way that I wanted. Debt freedom gives you options, which is why it should be a money goal that you consider.
Consider paying off your credit card debt, medical bills, personal loans, and even student loans. If you want a lofty goal, even consider paying off your mortgage!
You can leverage the debt snowball method to pay off your debt. I also recommend creating a repayment plan with the help of Undebt.it–an app that helps you track your debt payoff.
5. Start saving for retirement
Now is the time to secure your future. To do that, you need to save for retirement.
If you haven’t started putting money into your employer-sponsored 401(k) or an IRA account, one of your goals should be to do so. The earlier that you start investing in a retirement account, the more money you have in the future.
If you’re not sure how much money you need to have saved for retirement, I recommend using a retirement calculator. This will show you how much money you need to start saving based on the age that you want to retire
6. Start investing
Investing is one way to build wealth. Whether it’s in the stock market or in real estate, it’s a vehicle for your money to grow.
Make one of your money goals be to start investing. It doesn’t take much to get started, so don’t be intimidated. There are so many resources that can help you. Here are a few:
- Clever Girl Finance: How Investing Works, Grow your Money
- The Sassy Investor
- Intro to Investing Course
- Best Investing Apps for Beginners
- How to Get Started with Real Estate Investing
I only recommend investing once after you have started investing for retirement, have the discretionary income to do so, and have paid down debt. You never want to put your future and daily responsibilities at risk. Be responsible with your money.
7. Purchase a home or save for a down payment
Buying a home is a big financial move. It’s also another way that you can build wealth. As the value of your home increases, so does your net worth.
But a bone is also more than a financial goal. Buying a home means so much when it comes to building a legacy and being able to leave something behind. It’s the nucleus of families—where memories are made.
Consider making this one of your goals for the year or long term. Even if you don’t buy a home just yet, save for the down payment in a home sinking fund!
8. Start a side hustle
Your financial goals shouldn’t just be about spending money or saving it. You should also make it a goal to actually make more money. You can do that by starting a side hustle.
The internet has made side hustles a lot different from the part time jobs our parents may have had. You can literally start a side hustle from the comfort of your home. In fact, this blog is just one of the side hustles that I have.
If you’re not sure what you can do as a side hustle, I recommend checking out this post that has just about every side hustle that you can imagine by skillset. You should also check out this course on digital products. Selling digital products is one way that I’m able to make thousands of dollars in extra cash each year.
9. Increase your 9-to-5 income
In the vein of increasing your income, you should also work to increase your 9-to-5 income as well. Many times we have the ability to earn more money by simply asking for a raise. Women, especially, are often afraid to negotiate salary increases even though they deserve them.
Don’t let fear stand in the way of you earning more money. Have a game plan and ask for what you deserve in the workplace. If you need help with that, here are a few resources:
- Negotiate Your Salary to Earn what You Deserve
- How to Ask for a Raise
- Make More Money & Get Paid What you Deserve
These resources will give you the tools that you need to prepare for salary negotiations in the right way. I’ve leveraged them to increase my salary by 12%. So don’t miss out on your opportunity to make more money.
10. Start a business
I’m of the persuasion that you should never have all of your eggs in one basket. What I mean by this is that you should never rely on one sole source of income–namely, your 9-to-5 job.
Not everyone is cut out to be a full time entrepreneur, but everyone can own a business. Owning a business doesn’t just come with the benefits of extra income, but you also have tax exemptions that you can’t leverage just as an employee.
So whether you turn your side hustle into a business or start something from scratch, it’s definitely a financial goal that’s worth pursuing.
11. Increase your net worth
Your net worth is the difference between what you own and what you owe. The whole objective when it comes to building wealth is to increase your net worth. You do this by reducing your debt (what you owe) and increasing your assets (what you own).
Net Worth = Assets – Liabilities
If you want to include this in your goals for the year, simply set a target for what you want your net worth to be. For example, your initial goal could just be to have a positive net worth.
This may seem like a simple goal, but many people have a negative net worth. Reducing your liabilities enough to get above zero is actually a worthy goal.
12. Save for travel…and travel!
Want to take a vacation this year? Create a plan to save up for travel. A great way to do this is by participating in a savings challenge and opening up a savings account sinking fund just for vacation.
The point of a sinking fund is to save money over time with the intention of spending it later. So commit to putting some money in this account every time that you get paid. That way when it’s time for your vacation, you’ll have the money to make the trip debt free! (That’s the best kind of vacation to take).
Here are some resources that can help you plan your vacation on a budget.
- 15 Travel Tips to Help you Save this Summer
- How to Travel Abroad on a Budget
- Affording Travel: Saving Strategies for Financially Savvy Travelers
- Traveling With A Full-Time Job: How to Make the Most of Your Time
13. Save for your kid’s future
If you have children, a great goal to have is to save up for their future. This can mean saving for college, to help them purchase a home, or to even help them start a business. Whatever you decide, start saving now.
You can open a savings account for your child even before they’re born. You can also elect to open up a 529 or ESA savings account specifically for their education. Simply putting in a few dollars each month will make a world of difference when they’re older.
14. Automate your finances
One of the hardest things to do if you struggle with money is to automate your finances. To actually let a bill payment come out of your bank account can be scary. This is especially true if you’re not used to planning ahead and having money available.
Make this year the year that you put your money on autopilot. Have your bills on autopay, your savings on auto-draft, and even your investing! You can check out this post on what to automate in your finances to learn more about adopting this practice.
15. Invest in financial education
One of the best kinds of goals that you can have are those centered around self education and improvement. That’s why investing in financial education should be a part of the things that you want to accomplish.
This doesn’t mean that you have to go spend a ton on hiring a financial advisor. Contraire! It can simply mean that you purchase a book on personal finances or enroll in a course. The whole point is to expand your knowledge of money so that you can make better decisions.
How to set financial goals
Setting money goals is more than just a list of things that you want to achieve. Your financial goals should be very specific, measurable, attainable, realistic, and with a time limit. This is what you would call a SMART goal.
Getting SMART with your goals means that you get into the details. Instead of just saying that you want to get out of debt, you state that you want to pay off $78,000 in student loan debt in 3 years. This is specific, has a due date, should be realistic and attainable for your situation, and can be measured by if it is accomplished or not.
How to Achieve your Money Goals
After you’ve developed your goals, it’s time to do the work to achieve them. This is where the rubber meets the road and where many people fail. Here are the steps that you need to take to accomplish your financial goals.
- Write them down – Studies show that goals that are written down are visualized are far more likely to be accomplished than those that are not. Take the time to write your goals out and even create a vision board for your goals. Keep them at the forefront of your mind so that you are constantly reminded to work toward them.
- Break them down into daily, weekly, or monthly actions – Sometimes goals can seem overwhelming and unattainable because they’re so lofty. Break them down into daily, weekly, or monthly actions that are much less overwhelming. If you can commit to doing those tasks, then you can easily accomplish your goals. Automating your finances is a huge part in making this even easier.
- Track your progress – Some goals take longer than others, so it’s important to see your progress in order to stay motivated. Leverage visual trackers to see how far you’ve come and how close you’re getting to achieving your money goals.
- Get accountability – Having someone support you and hold you accountable for your goals is probably the best thing that you can have. Oftentimes, we’ll get lax and try to give up when it gets hard. An accountability partner will encourage you to keep going and make sure you hold up to your plan.
Final Thoughts on Setting Money Goals
Money drives almost all facets of life. So, getting control of your finances is one of the best things that you can do for yourself. The first step is setting financial goals that you can work toward.
Hopefully, you were able to gain some ideas from these financial goals examples that can get your started. Don’t forget to check out all of the wonderful resources mentioned throughout the post. You’ll want to leverage these to assist you in achieving your goals.