Setting and sticking to your financial goals is the foundation of making smart money decisions and living a prosperous financial life. Still, getting started is often daunting and may feel too big to tackle. Here, we’ve broken down the big concept of ‘financial goals’ into 6 steps, so you can make a plan that is both challenging and achievable.
1. Make sure you have a solid foundation of financial knowledge
Before you make money goals, it’s a good idea to ensure that you understand money concepts. Studies show that roughly 2 in 3 adults consider money a significant source of stress, a problem potentially linked to a lack of financial knowledge. Understanding financial concepts like credit, financial accounts and online banking can help you build wealth – and lower stress – in the long run.
If you’re not sure where to look to build your financial knowledge, we encourage you to access free financial education courses sponsored by Master Your Card, the FDIC or SEFCU. These courses can help you answer pressing questions like “how do I build credit?” and “how can I better manage my debt?”
2. List your financial goals for the year using the S.M.A.R.T. process
Ensure you’re setting goals for yourself that are SMART. SMART goals are Specific, Measurable, Achievable, Realistic and Time-bound. For example, rather than making it a goal to ‘save lots of money,’ make it a goal to ‘save $1,000 by June 1.’
3. Prioritize your goals
Look at all of your goals and label them in order of importance, with 1 being the most important. This will help you decide which goals really mean the most to you and make the large task of achieving financial goals more manageable.
4. Make a plan to achieve your goals
When it comes to achieving financial goals, it’s not enough to simply write the goal down, you need to make a plan to make it happen. You can find plenty of financial calculators online to help you plan out everything from budgeting to savings and debt repayment.
5. Have a system in place to track your progress
It’s difficult to understand where you stand in achieving your goals if you don’t track your progress. Make it a point to take 15 minutes out of each week to evaluate how you are moving towards achieving your goals. Keep track of your progress in a notebook, computer file or Excel sheet. If you’ve set a savings goal, mobile banking apps can help you easily keep track of the money you’ve saved.
6. Keep yourself accountable
While setting a goal is the first step to achieving, it’s certainly not the last. It’s important to keep yourself accountable throughout your entire financial journey. This accountability can come in different forms. Some people prefer to create a commitment contract, which includes a reminder of your commitment to achieving your goals. You should keep your commitment contract close at hand like on the refrigerator or your next to your bed. You can also share your commitment contract with someone you trust, like an accountability partner. An accountability partner is someone you trust to share your goals with, may be a friend, a family member or a mentor. This person will cheer you on as you make progress towards your goals and set you straight if you start to stray. It may be useful to hold a regular check in with your accountability partner, even if it’s just a short text with an update on your progress.
Make a plan and make it happen. Cheers to achieving your financial goals!
