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How to set short term financial goals (and long ones too!)


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Setting financial goals is a big part of achieving overall financial health. After all, goals keep us moving forward and ensure that, down the road, we have the things we want. But what's the best way to set a financial goal? What do financial goals even look like? How do I know if I’m setting the right financial goals for myself so that I can live my financial best life? Answering these questions can be tough, which is why I’ve put together this guide on how to set the best financial goals. 

Here’s what we’ll cover:

    • How to set financial goals
    • Examples of strong financial goals
    • How do I decide which financial goals are right for me?
    • How to take your goals and make them S.M.A.R.T.
    • Sticking to your financial goals
    • How to get back on track with your financial goals
    • How to save/pay for multiple financial goals at one time.
Want to take your money management to the next level in 2024? Learn more about The Financial Best Life Blueprint, our digital product that comes with e-books, excel spreadsheets and more to help you take control of your finances, eliminate the overwhelm that comes with managing money, and achieve your money goals faster. FBL readers can take $10 with code NEWYEARNEWYOU. Click here to explore.
  • How to Set Financial Goals

    Setting financial goals only requires three things:

    • thoughtful consideration
    • the actual setting of goals
    • ….and then shoring up our money habits to give ourselves the best chances for success.

    See? Easy peasy.

    But it isn’t enough to say, “I want to stick to my budget” or “I want to pay off debt.” For the best chances of success, we have to make them S.M.A.R.T – Specific, Measurable, Achievable, Relevant, Time-Bound.

    Examples of Short Term Financial Goals

    What follows are just 15 financial goals I came up with off the top of my head. They’re specific to me and my story over the years, but you can adapt them to your financial journey with just a few tweaks. 

    Longer-term financial goal examples

  • We all only make a certain amount and can only tackle so many financial goals at a time. So, it is key to prioritize a few goals that are the most important to you in a given time frame and then focus on one goal, finish it, and move along to the other.

    How do I decide which financial goals are right for me?

    Take stock of the year

  • The start of a new year is a great time to set financial goals because you have a whole, fresh year ahead. Before you begin planning the future – look at the past.

    Ask:

    Answering these things in advance will help you to set priorities.

  • Prioritize eliminating debt 

  • Debt. It's expensive. Every dime that sits in savings is worth less when you have debt hanging out. And while it is hard to manage debt with other savings goals like retirement and emergency funds, the fact of the matter is that with interest rates on savings accounts so low, you need to pay off high-interest debt first in order to get ahead.
  •  So when brainstorming your financial goals, prioritize the items that are costing you the most.
  • Finally…throw in some savings goals, too

    Having a nice emergency fund before you pay off debt is important to keeping out of the cycle of using credit to cover the unexpected. A healthy emergency fund should be your number one priority before tackling other financial tasks. You'll keep this money in a High-yield savings account so it can earn more in interest over time. Don't touch it!

  • When it comes to short term financial goals, decide what YOU want

  • Don't forget to listen to your inner voice. Ask:

    • What do you want to accomplish?
    • Which goal completion would make you happiest?
    • Which completion would free you up the most to do something else you really want to do?
  • Once you've contemplated the four sections above, now you're ready to put “pen to paper” so to speak, and draft those goals. Below is a four-step system to follow to ensure your goals work for you rather than against you.
  • To do this, we’re going to take a financial goal and make sure it follows the S.M.A.R.T. methodology.
  • How to take your short term financial goals and make them S.M.A.R.T

  • I’m going to use the first financial goal example I listed above, “I want to save a $1,000 emergency fund in 45 days.
  • #1 – Set a Specific (or Quantifiable) Goal

  • “ I want to save $1,000 in 45 days.”

    What makes this goal quantifiable?

    • We know we want to save $1,000. That’s the real goal. 
    • This is way more specific than saying, “ I want to save up an emergency fund,” “Or I want to pay off debt.”
    • This gives an identifiable number to shoot for, and it's very black and white regarding whether or not this goal has been reached. I love apps like Qapital for short-term financial goals like this.

      My favorite money saving app is Qapital. While it does cost a monthly subscription (I pay $3/mo), it helps me save extra for travel and special occasions by rounding up when I use my card. I love it so much and it is the only money saving app I use, year after year. Click here to try and get $25.

    #2 – Making It Measurable

    How do we best measure this goal? Using our example, $1,000 in 45 days is easily measured – by the amount of money we’re able to save.

    This is why financial goals make great S.M.A.R.T. candidates. Because they are (usually) numerically based, they’re inherently measurable by nature!

  • #3 – Set an achievable goal

  • It's important to set a goal that you can achieve. Instead of trying to accomplish some crazy goal, like paying off alllll the debt. Set something reasonable.

    • Using my example, $1,000 may not be doable in 45 days.
    • Depending on your salary, it may be more achievable to save up $1,000 in one year.
    • Feel free to adjust as necessary to your financial situation.

    #4 – Make it relevant

  • This is probably my biggest beef with using the S.M.A.R.T methodology. “Relevancy” is more of a business consideration than a personal one. How do you make a personal finance goal relevant? Of course it’s relevant – getting your financial shit together is incredibly relevant!

    • An example from The Balance states that relevancy is meant to take into consideration conditions in the environment.
    • For example, maybe don’t blow all your money on vacation if you know you’re having a baby in the coming months. Etc. Etc.
    • Relevancy means you should take into consideration any events or changes in your life that could prevent you from accomplishing your goals.

    #5 – Time Bound (A.K.A. Set a Deadline)

  • A whole year is a long time to commit to a goal. So many things could change, and enthusiasm is certain to wane. To help make a goal more achievable, try setting a smaller, shorter goal, preferably one that will be reached a few months after setting it. Or, if you're sure a one-year goal is for you, check in periodically throughout the year to make sure you're on track.

    In our example above, we’ve already made our financial goal time-bound by challenging ourselves to save up $1k in 45 days. And for those interested, here’s how I did just that.

    How to ensure you accomplish your financial goals this year

           Set rewards in advance

    • It doesn't matter how lavish or simple your rewards are, just so you set them in advance.
    • Give yourself a treat for every month you do all the things you set out to do.
    • I like to recommend a goal of no more than 5% of the balance you just paid off (if you’re paying off debt as a goal, for example) for a treat.

      Do it with a partner or community

      Everyone is more successful when they have someone (or something) holding them accountable to their goals. For me, when I did my $8k in 90 Day Challenge, I put it on my blog specifically so my readers could keep me accountable. I didn’t want to fail in front of them.

      Accountability doesn’t mean a person has to be in the trenches, side-by-side with you working on the goal as well. It just means you have someone checking in on your progress and applying a slight bit of pressure (or guilt) if you’re behind.

      Create a financial goals vision board

      I have a big tutorial on creating vision boards because I believe in them and think there is a BIG MAGIC at play in how they work. Even if you don’t believe in the spiritual wisdom behind a vision board, there’s nothing wrong with creating a visual reminder of what you’re working so hard for.

      • For financial goals, choose imagery of what your life is going to look like after you complete your goal.
      • For example, put up an image of the Gucci shoes you want, or the beach you’re going to work from remotely once you save up enough to quit your job. 
      • A recent TD Study showed that 82% of business owners with vision boards believed they accomplished and achieved more.

      Try a mantra

      Below are some of my favorites. And you don't have to do them all each day (although you can) I like to have a repertoire of mantras because I like picking and choosing depending on what I'm dealing with each day.

      If you’re setting your own with a notebook and paper, ask:

      • What are you struggling with?
      • Which messaging would you like to reinforce with yourself?
      • What word or phrase inspires you when it comes to meeting your goals?

  • How to get back on track with your financial goals

  • Setting goals is easy.

    It's the breaking bad habits and staying disciplined part that usually gets in our way.

    How hard is it to get back on track with your financial goals once you’ve slipped? The point isn't to do it perfectly, but to just get back up. Below is a blueprint for tackling the most common challenges that keep people from truly succeeding with their financial goals.

    Overuse your credit card?

    Spend more than you make?

How to save and pay for multiple financial goals all at once

What managing multiple financial goals might look like 

When I was single and kid-free, my financial goals in any given year looked a little something like this:

And because there would only be about 5-6 of them in any given year, I’d take them down one by one, allocating everything I had in savings within a month to the highest priority goal and then moving on to the next. Kinda like the debt snowball method but for savings goals, if that makes sense.

How to prioritize your financial goals

Map out what is most important/pressing first

Even with competing desires, you’ll still have to set priorities (even if you are married, even if you manage your finances separately), and come on, this isn't rocket science: I'm willing to BET there’s usually one or two financial goals that take precedence over all the others. 

But in case you're still stumped, here's how I would recommend funding the goals if you're completely starting from scratch.

  • If you don’t have one, I would prioritize putting together a fully-funded emergency stash. 2020 taught us to expect (and prepare) for the unexpected and we don’t know what lies ahead in the new year. Here's how to set up an emergency fund.
  • Then, I would prioritize debt payoff first (everything but the mortgage). This is because typically credit card/personal/student loan debt is the most expensive, and getting rid of it will allow you to allocate more to other goals down the road. More money in the budget is the KEY to being able to hit all of those multiple savings goals. Here is a free debt tracker to get you started.
  • Then set the goal for a home purchase. And I know certain financial experts are going to come at me for recommending this over maxing out retirement but hear me out. Real estate is a great, relatively stable asset. In most areas, you’ll spend less on a home than you will on rent, and even if you do spend more, it is toward an asset you can leverage to earn more in the future. Here's the complete 8-step guide on how to buy a home.
  • Then retirement goals (if you can). This gets bumped up to the very tippity top if you have an employer who matches employee contributions. Because that is free money. And we do not leave free money on the table.
  • Then all the other savings goals, including those for your children. While it is nice to prepare the future for your children, this shouldn’t come at the expense of your own retirement.

Have an annual meeting

If you have a partner or spouse, you'll need to get on the same page since the goals you have are likely goals that must work for the entire family.  Sit down with statements and spreadsheets, it can be as frequent or infrequent as you like. 

Bare minimum: at this small “meeting” we talk about what you did accomplish financially the year before and what you'd like to do moving forward. You can get more in-depth about what your budget is and how you'd like to allocate your funds, but the point here is that I'd like you both to be on the same page about what you're DREAMING about.

Allocate in the way that makes the most sense for your family

Often, when I get the question of “how to manage multiple financial goals,” it’s because people want some magic bullet that is going to help them find money in their budgets in order to achieve every single milestone they want to hit.

And while I think it is a great goal to try and stretch yourself to meet all of the priorities in a year, say or some other certain amount of time…I hate to tell you, but it most often doesn’t work that way. 

This is why it comes back to setting priorities.

For example, you may only have $800 to save at the end of each month after everything else. 

If you’re trying to knock out student loans, maybe you give the lion’s share of this money to the loan payments and then only $50 each month to everything else: kid’s college, renovating your bathroom, whatever. (FYI – These are called sinking funds by some.)

The important thing here is to get into the habit of saving for multiple goals.

Baby steps do add up to big sums in the end

*Jordann Brown contributed to this post.

Want to take your money management to the next level in 2024? Learn more about The Financial Best Life Blueprint, our digital product that comes with e-books, excel spreadsheets and more to help you take control of your finances, eliminate the overwhelm that comes with managing money, and achieve your money goals faster. FBL readers can take $10 with code NEWYEARNEWYOU. Click here to explore.