How to Create Personalized Financial Goals
Your financial goals are one of a kind. What they are depends on your unique situation, who you are as a person, and what you want out of life. The best place to start is finding your why – the reason you’re working toward your goals. Think of it like your North Star, guiding you on your financial journey.
When it comes to financial goals, you have to take them in stages. Saving up for a vacation is fun, but not the best use of your money when you have a pile of debt. Take care of your financial health first before moving on. Prioritize stability so you can then have fun with your money. Remember that even if you build a fancy house, the foundation has to be strong or it’ll fall apart and you’ll be homeless.
Anyway, what does this look like? If you have debt, make a plan to pay it off. Don’t have an emergency fund? Make it a goal to save 3-6 months of expenses. Have bad financial habits? Put in intentional effort to change those habits for the better.
Once you have your basics taken care of, think toward the future. Do you want to buy a house? Retire early? Travel a lot? Whatever it is, plan for it. Also remember that your goals don’t have to be monumental or popular. They only have to matter to you. I recommend creating a financial vision board to inspire you and keep you on track. Take a look at mine below + read to the end to hear about my personal financial goals.
The Life Cycle of Financial Goals
Whatever goals you set now may evolve with time. That’s to be expected. Once we reach a goal, we tend to shift our focus to the next one. Even if we don’t reach a goal, what we prioritize in one season of life might not be a priority in another. If you once prioritized having a really nice car, then pop out a kid, you’ll need to find something more practical than a Ferrari.
We may even set out goals originally that we decide don’t matter to us anymore. Maybe you really wanted to buy a house but decided that traveling across the world was more important. Or you were busting your butt to retire early but decided to slow down to focus on your family or your health. Don’t worry that your goals have changed – it’s okay!
A lot of times when we set goals, we feel we have to see them through or else we’re a failure. While seeing your goals through is generally a good practice to have, priorities change. If a certain goal isn’t serving you anymore, feel free to let it go or even adapt it to work for you. It’s better to slow down or readjust than give up entirely.
Reevaluating Your Goals to Make Them Work For You
Like I mentioned above, your financial goals are likely to shift over time. Make sure you’re actively pursuing what you want by taking time to reevaluate. Now I’m gonna give you some extra steps so you can hold yourself accountable and hit all your financial goals – because if not you, then who?
Write down your financial goals so you can reference them at any point. Make sure to set a specific timeline to accomplish them. They could be yearly, quarterly, monthly, whatever works for you. Also make sure your goals are quantifiable. Instead of saying “my goal is to save money,” say “my goal is to save $5,000 in 6 months”.
When you go back to reevaluate your goals, you have two objectives. One of them is to get a feel for if any of the goals you’ve set still serve you. The other is to make sure that you’re staying on track to hit the goals you want to meet. So if one of your goals was to save for a vacation but you decided that wasn’t a priority anymore, cross it off. If you really want to pay your car off by the end of the year, make sure you’re paying down enough each month to hit that goal.
What Are My Financial Goals?
Maybe you want some inspo or you’re just curious 👀 , but here are my financial goals for 2024 and how I’m progressing:
- Pay off my car —> I paid off my car in April! ✅
- Save $10,000 emergency fund —> I’m over halfway to my savings goal ↗️
- Put extra money to my debt to pay off quicker —> I’ve been putting about an extra $800/month to pay down my debt ⤵️
- Invest in my health —> I set up a FSA so I can pay for doctor appointments & lower my taxable income, plus I prioritize healthy foods (a bit pricier) so I can cook at home 🥗
So how am I able to make so much progress on my financial goals? First thing is because I’m not overwhelming myself with trying to do a bunch of things at once. I have four goals that I decided to prioritize and stick with them. It’s easy to give up on your goals if you’re juggling too many and they just become impossible to keep up with.
Of course I have other financial goals (like investing & saving for a house) but those were not as much of a priority to me as paying off debt and having money to fall back on in case of an emergency. I needed to build my foundation if you will (calling it back to the metaphor I made earlier) before building the structure of my house.
The Power of Sacrifice
Another huge piece of the puzzle is sacrifice, even though I don’t really feel like I’m making a sacrifice. I feel like sacrifice has become a dirty word, accompanied by visions of dramatically clutching your iced coffee to your chest like a baby as an invisible entity tries to rip it out of your arms. However, I don’t feel the “sacrifice” because my priorities have shifted.
If your priorities are going out or getting coffee or online shopping, taking those things away will make you feel deprived because you’ve lost something. You’ve sacrificed the thing you love. But if you shift your mindset and decide that something else is more important, it becomes easier to let go of everything else. It’s all about what you decide is important to you.