4 Things to Consider when Setting Personal Financial Goals

Setting personal financial goals is a great way to make sure your money is going where you want it to go. Your financial goals could be saving up for a large purchase, eliminating debt, creating a safety net, and more.

Before you start putting together your personal financial goals, we have four things for you to consider.

1. Know the “Why” behind Your Goals.

First, it’s important that you know the “why” behind your goals. If your goal is to save up for a down payment on a house, list reasons why this purchase means so much to you. These reasons can help keep you from making impulse purchases down the road.

If you are planning personal financial goals with a partner or family member, make sure that everyone involved agrees on the “why” behind your goals. Working toward goals is easier when everyone understands why you’ve set them.

You may choose to print out a picture to represent your “why.” Hang this in a place where you will see it so you will be reminded about your financial goals.

2. Set SMART Goals.

When setting goals, people often use the acronym SMART to help them remember how to set good goals. A goal is SMART when it is:

  • Specific – be as specific as possible on what your goal will be. Instead of “Decrease my debt,” a specific goal might be “Pay off my student loans.”
  • Measurable – make sure your goal is one that can be measured, so you know when you’ve made progress toward it. Instead of “Improve my financial situation,” a measurable goal would be “Eliminate all debt and build $5000 in savings.”
  • Achievable – make a goal that will stretch you while still being possible. If you make $50k a year, paying off $60k in student debt by the end of the year would not be achievable because of living expenses.
  • Relevant – your goal should make sense for you and your family. For example, saving up for a reliable car may make more sense than saving up for a down payment on a house, especially if your current car has had pricey repairs. Relevant goals will be ones that make sense for you and your situation.
  • Time bound – your goal should have a deadline. If your goal is to pay off a car loan, you might give yourself a deadline a year from now to reach that goal.

When you set SMART goals, you set yourself up to succeed. Good goals give clarity and help you focus on the things that matter most to you.

3. Break Down Bigger Goals into Smaller Steps.

Some financial goals are so big that they should be broken down into smaller steps. For example, a goal to eliminate all of your debt could be broken down into smaller goals. A short-term goal may be to pay down one credit card or to pay off the last year of your car loan.

While you will still be working toward your bigger goal to eliminate all of your debt, breaking down your goals can help you celebrate your progress while keeping you from becoming overwhelmed by the larger goal.

4. Plan a Reward.

Who doesn’t like rewards? While achieving your financial goal can be a reward in itself, it is helpful to plan rewards for yourself.

If your goal is to pay off your student debt, you may choose to have a small celebration when you’ve finished paying off your loans. You could go out to eat with a few friends or buy something small you’ve been wanting. Whatever you do, choosing to celebrate your success allows you to reinforce positive feelings about setting and meeting goals.


Setting financial goals is one way to make sure you’re headed in a positive direction with your finances. After considering the above tips, you’re ready to create financial goals of your own. Whether you want to pay off your debt or save up for a large purchase, these tips will help you create a goal that works for you!

Written by