How to Stick to Your Financial Goals
You know you need to have financial goals, but you’re not sure where to begin.
Even when you have goals, it can be challenging to follow through with them, leading many to give up.
In this blog, we’ll share tips on how to set and achieve financial goals based on our decades of experience working with clients.
How To Set Financial Goals
It's not enough to set just any goals or pick random numbers and hope for the best. You need to set goals that are realistic and achievable (but hopefully a little aspirational as well)!
Below are some questions you should ask yourself and tips to keep in mind to help you set effective and attainable financial goals:
What’s Your Current Financial Situation?
Before setting any financial goal, you must first understand where you stand financially. This means taking a careful look at your income, expenses, assets, liabilities, and credit score.
For instance, if you have a lot of debt, it may not be realistic to set a goal of saving for a down payment on a house until you've paid off most of your higher interest debt. Of course, this depends on your unique situation and goals, but this is why understanding your current financial situation is an important step to goal-setting.
Read More: How To Create a Debt Payoff Plan
What Do You Want to Accomplish in 5 Years, 10 Years, and Beyond?
Having long-term financial goals is vital in ensuring that you achieve financial stability in the long run. Identify the primary objectives you want to achieve and break them down into smaller, achievable steps.
For example, if you want to buy a house in 5 years, you can break down this goal into smaller steps such as saving for a down payment, improving your credit score, and paying off debt. This will make the goal less intimidating and more achievable.
Each Financial Goal Needs a Deadline and a Price Tag
Each goal needs to have a “deadline” and a “price tag” so that it's measurable–and so that you can proactively plan to accomplish it. This is an essential step that often gets forgotten.
Even if you have to re-adjust along the way, having a deadline and a clear price tag in mind is essential to actually achieving your goal.
Are You and Your Partner Aligned?
If you have a partner, you’ll need to make sure you’re aligned not only on what your goals are, but also how you’ll attain them. Achieving financial goals is not a one-person show, so don’t skip this necessary step.
Create a Realistic Savings Plan
You need to know how much you can save and how long it will take you to achieve your savings goals. Determine what you need to save for, how much you need, and the timeframe in which you plan to save.
It's important to be realistic about how much you can save. If you try to save too much too quickly, you may become discouraged and give up on your goals.
Consider starting small and gradually increasing the amount you save as you become more comfortable with the process.
Create a Spending Plan
Instead of having a budget that can be restrictive, create a spending plan that enables you to prioritize your spending.
Identify your necessary expenses such as rent, utilities, food, and an emergency fund. Once that is set, you can plan for everything accordingly. For more advice on creating your spending plan, check out our blog with tips and advice to do this.
Having a spending plan will help you avoid overspending and ensure that you have enough money to cover your necessary expenses. It will also help you identify areas where you can cut back on spending and redirect those funds towards your savings goals.
Read More: Why Budgets Don’t Work (And What You Should Do Instead)
Decide How Much You’ll Save, then Automate
After understanding your current financial situation and creating a spending plan, you can decide how much you want to save based on what’s left. With that savings plan, you can set up automatic monthly transfers to your savings account, brokerage account, or retirement account (the account will depend on your specific goal).
Automating savings will help you stick to your plan even on days when you're low on motivation. It will also help you avoid the temptation to spend the money you intended to save.
By making it a habit to save a certain amount each month, you'll be well on your way to achieving your financial goals.
Be Kind to Yourself
Remember that maintaining financial goals is a marathon and not a sprint. If you make a mistake, don't feel discouraged–instead, use it as a lesson learned. Develop a mindset that encourages progress over perfection so you can stay motivated even when the going gets tough.
And remember to celebrate your successes along the way, no matter how small they may be.
Be Proactive About Potential Problems
In other words, prepare instead of repair. At Triune, we encourage our clients to be prepared to face any financial emergencies by having an emergency fund. Your emergency fund needs may vary, but three months of your living expenses in savings is a good rule-of-thumb. This way, you'll be able to deal with any financial emergencies that might arise, without derailing your financial goals.
It's also important to regularly review your financial plan and make adjustments as necessary. Life is unpredictable, and unexpected expenses can arise at any time. By regularly reviewing your plan, you'll be better prepared to handle any financial challenges that come your way.
Resources that can help
If you want to achieve your financial goals, don't be afraid to seek help. There are many resources available that can help you learn more about money management, financial planning, and investments.
Online financial planning tools. There are many websites that offer free financial planning tools, such as Mint. These tools can help you create a personalized financial plan and track your progress towards your goals.
Blogs, podcasts, and books. Experts in the field give free advice every day (check out the Millenial Money blog or the Planet Money podcast at NPR). Tap into their expertise and use what makes sense for your planning and goals.
Financial Advisor. A financial advisor can provide personalized advice and guidance on how to achieve your financial goals. They can also help you create a customized financial plan that takes into account your unique financial situation and goals.
Sticking to your financial goals requires discipline and focus, but with effective strategies and a proactive mindset, you can make your financial goals a reality. Remember to celebrate every milestone you achieve and to stay motivated even when financial challenges come your way. By taking advantage of the many resources available, you can make your journey towards financial stability more manageable and successful.
ABOUT TRIUNE FINANCIAL PARTNERS
Triune Financial Partners is committed to empowering people with life-changing financial counsel. Triune is an independent firm that values clarity, simplicity, and transparency. We're a fiduciary, which means we always put our clients' interests first. In addition to Financial Life Planning for individuals and families, we also serve 100+ businesses, churches and nonprofits to craft powerful 401(k) and 403(b) plans for their organizations. Whether you're working with one of our Financial Life Planners or setting up a 401(k) plan for your organization, Triune is here to help you thrive financially.
Interested in working with us? Get in touch here.
