When discussing financial goals, many of us fall into the trap of thinking about get-rich-quick schemes. However, in reality, accomplishing financial goals requires hard work and discipline. Setting short-term goals and long-term financial goals not only entails accumulating wealth but also gaining a strong financial footing, which you will sense from real-world financial goals examples.
In this article, we define what financial goals are and list common examples of financial goals. So if you’re unsure how to go about handling your finances to reach your target, continue reading.
What Is a Financial Goal?
A financial goal is a target you set for yourself related to money and finances. It involves money management activities like spending and saving to help you achieve financial success. Financial goals can be short-term, mid-term, or long-term goals that will give you a sense of accomplishment on how you handle your financial resources.
Who Uses Financial Goals?
- Students
- Parents
- College graduates
- Small business owners and companies
- Professionals
Why Are Financial Goals Important?
Financial goals are important because they help you stay accountable and keep your financial health in check. They help you with financial management in every stage of life. Your goals also influence how you spend money and every financial decision you make.
Real-World Examples of Financial Goals
This section compiles real-life, practical examples of common financial goals. The examples here involve realistic goal-setting, from having a monthly budget and paying off your credit card debt to saving for a comfortable retirement.
- Get out of debt
- Build an emergency fund
- Set a monthly budget
- Save extra cash
- Pay off student loan
- Buy a house
- Pay off mortgage
- Have a fun fund
- Start a business
- Get a retirement plan
10 Great Examples of Financial Goals
Financial Goals Example 1: Get out of debt
Debts could include credit card debt or any money you owe to someone or someplace else. Sometimes, we don’t plan to go into debt but circumstances occur, and you may feel stuck financially. When setting financial goals, debt reduction should be high on your list of financial plans. Eliminating your debt frees you up to accomplish other financial targets.
Financial Goals Example 2: Build an emergency fund
An emergency fund is money set aside for an unexpected expense or unplanned situation. Having an emergency fund helps you cover expenses that pop up without hurting your cash flow. You can set automatic deposits from your main account into an emergency savings account or deposit small amounts of money weekly and increase it as you go.
Financial Goals Example 3: Set a monthly budget
Spending recklessly is easier to do when you have no set budget. Setting a realistic monthly budget allows you to track your money and see where you can lessen your expenses. It also helps you stay committed to your savings goals.
Financial Goals Example 4: Save extra cash
Finding and building different income streams will let you earn extra cash apart from your regular monthly income. You can then deposit this extra income to a high-yield savings account, so that it will also earn on its own from high interest rates. Alternatively, you can choose to use this extra money to establish another source of income like stocks or mutual funds.
Financial Goals Example 5: Pay off student loan
Student loans are designed to help students pay for their college tuition. You should practice sound financial planning as early as your college years to pay off your student loan debt as soon as possible. You can start by diligently setting aside monthly payments or making extra payments whenever you earn additional cash.
Financial Goals Example 6: Buy a house
Buying a house is a dream come true for most people. Buying a house may be financially taxing, but including it as a financial goal will help you plan a course of action and achieve it more quickly. Saving money for a down payment is typically the first step in achieving the financial goal of buying a house.
Financial Goals Example 7: Pay off mortgage
A mortgage is an agreement between you and the lender. It gives the lender the right to seize and take your properties in case you cannot repay the money you borrowed alongside any interest accrued. If you have a mortgage to pay, settling that right way is extremely important to save yourself from future stress.
Financial Goals Example 8: Have a fun fund
Having a fun fund or entertainment budget keeps expenses within an allowable range whenever you go on vacation or participate in leisure activities. Everyone deserves to have a dream vacation and breaks during their busy lives, so, it’s better to be financially prepared for it through proper financial planning by saving in a fun fund.
Financial Goals Example 9: Start a business
Many of us dream of starting a business and have a personal goal of doing something we love. This usually involves a monetary investment, so saving for the new business’s startup costs is an important financial goal. After saving enough and launching, managing the business’ finances and revenue is another important financial goal to implement, alongside working toward growth.
Financial Goals Example 10: Save for retirement
Saving for retirement is a long-term financial goal. While some employees can count on an employer-sponsored retirement plan, having your own retirement plan gives you more control over your retirement goals. Saving for your own retirement grants you peace of mind and ensures that you can still lead a comfortable life when you can no longer work.
Pro Tips to Stick to Your Financial Goals
- Practice discipline. When dealing with finances, discipline is crucial for you to achieve your goals faster. Practicing discipline allows you to stick to your financial goals and not spend recklessly. You can also learn how to build this habit through financial management courses.
- Read about financial management. Gain financial knowledge from books, so you can make much better financial plans. There are numerous personal finance books that you can buy to get the information and wisdom you need for money matters.
- Attend financial wellness gatherings. Attending or being a part of financial wellness gatherings can motivate you to make your financial goals because you’re not alone in your struggles and progressions. You can also meet professionals who could become a financial advisor or mentor and help you create better action plans for your finances.
What Should Be the Next Step in My Finance Learning Journey?
Financial goals help you prepare for the future by placing guardrails on your financial decisions and actions today. We all have dreams we want to achieve that require money, and making financial goals can help bring these to fruition. So get out your pen and paper, and start writing down financial goals that matter to you.
Financial Goals Examples FAQ
Get a pen and a notebook to write down the financial goals that immediately cross your mind. Prioritize them and be specific by setting deadlines and monetary targets for each.
Saving for retirement is possibly the best financial goal. As humans, the older we become, the less work we can do. Having a financial plan for retirement gives you the confidence and peace of mind that the lifestyle you enjoy will be covered when you are no longer working full time.
The three most common financial goals are saving for retirement, setting up an emergency fund, and paying off debt.
Long-term financial goals are goals that take years to achieve, and typically require a lot of time and proper planning. For instance, saving for retirement is a long-term goal. On the other hand, short-term financial goals are targets that you want to achieve in weeks, months, or a maximum of two years. Some examples are starting an emergency fund or saving for a family vacation.
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