Most working professionals are aware of the importance of goals and their impact on their day-to-day lives. However, some key areas may be overlooked during your goal-setting process. One of the most important areas to set goals in is your financial life.
With this in mind, setting financial goals can be difficult because you may not know exactly what you’re aiming to achieve over time. No matter where you may be on your journey, establishing goals for your finances can be done at any point in time.
Let’s take a closer look at why establishing financial goals are so important and how you can begin setting some of your own!
Why Are Financial Goals Important?
Consider other goals you’ve set in your life. Each are designed to carry you towards something that you’re hoping to achieve in the future, no matter how far away that end goal may be. Without them, you may feel as though you’re without direction or purpose.
Financial goals are essential because they determine the course of your future. Whether you’re looking to save money to buy a home, earn more in your career path, or even plan for retirement, goals dictate your future.
No matter what your current situation may be, it’s never too late to set financial goals and improve your financial health and well-being. But what goals should you be aiming for, and how do you set them?
How to Set Financial Goals
Setting goals may seem easy. But there is more to goal-setting than simply writing them down. develop serious financial goals that are within reach, you need to make sure that they are:
- Realistic or achievable: It can be easy to set a goal like “I want to make six-figures this month.” However, getting to that point isn’t always as simple as writing down your wish. Whenever you set a goal, make sure that it’s realistic and achievable. If it’s outside of the scope of possibility, you’ll do more harm than good.
- Measurable: Every goal you set should be broken down into small, measurable steps. For example, you can divide savings goals into increments of a hundred dollars each. This ensures that you can see your progress and stay driven towards reaching your goal in its entirety.
- Motivational: Goals only work if you do. Set goals that you’re passionate about achieving. If you’re not genuinely interested in the goals you set, it can be much harder to reach the finish line!
- Specific: Every goal should have a hard deadline, a comprehensive description of what you’re hoping to achieve, and why you need to accomplish that goal.
Now that we have a better grasp on how to set goals, what types of goals might you be setting at this point in your life?
Setting Short-Term Financial Goals
Short-term financial goals are goals that you can chip away at now. Some examples of short-term goals for your finances include:
- Creating a comprehensive budget for your expenses
- Opening up a savings account for an emergency fund
- Starting your first investment or retirement account
- Paying off small amounts of debt like credit card debt
Put simply, short-term goals take less time to achieve and either set the stage for your long-term goals or will be cleared almost instantly. These act as the foundation for your financial life.
Setting Medium-Term Financial Goals
Medium-term financial goals look toward the future but are still within reach in a matter of years. Some examples of medium-term goals include:
- Paying off larger loans, like your student loans
- Purchasing a new vehicle or other major expense like your first home
- Saving a specific amount of money that will go towards a large payment
- Returning to study to potentially earn more income or to change career paths
Medium-term financial goals will still come relatively quickly, but you will need to work harder at them to ensure you reach your destination.
Setting Long-Term Financial Goals
Long-term financial goals are designed to help you achieve something down the road. Although we may not always be focused on our life in the future, some long-term goals to inspire you include:
- Creating a retirement plan to help you maintain your lifestyle
- Figuring out which passive income streams to develop
- Helping your children save for their future education
Don’t fret if you can’t come up with anything off of the top of your head. You can turn the above ideas into short-term goals that can help you plan for the long-term more effectively.
How Do I Get Started?
As you can see, financial goals play a crucial role in our lives, more so than we may realise. If you’re ready to set goals that help you move forward and prepare for a more stable, secure future, register for our online course to get started on your personal financial journey!
Important Information: This information is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should obtain professional advice before acting on the information contained in this publication
Creo Wealth Pty Ltd ABN 96 605 894 415 is a Corporate Authorised Representative (No. 1236172) of ClearView Financial Advice Pty Limited ABN 89 133 593 012 AFS Licence No. 331367 GPO Box 4232, Sydney NSW 2001