8 Tips for Setting Financial Goals and Crushing Them

Setting financial goals helps us to take control of our financial lives.

Good, clear goals provide long-term vision for our finances.

They help to guide us and act as guardrails to keep us on track.

They also allow us to measure our progress and ultimately achieve financial success.

Here’s the thing:

The importance of setting goals can’t be underestimated.

If you want to get anywhere you need a roadmap. Your goals provide that roadmap.

If you’re ready to create and follow a plan for your finances, here are 8 tips to help you set good, actionable financial goals and crush them.

1. Narrow your focus.

In this hustle-and-bustle society, we tend to try to do as many things as we can at once. We spread ourselves so thin that we only make a little progress on each task on our list. It takes so much longer to complete anything.

The same is true in our financial lives.

We’re trying to pay off debt while investing for retirement and maybe dabbling in some non-retirement investments, and don’t forget about saving whatever we can for the kids’ college, all while trying to save for a vacation/house/new bag/insert your wish-list item here.

What if you made 40% progress on one financial goal, rather than 4% progress on ten?

I’m not saying you have to completely stop pursuing everything else, but choose one to focus on.

For example, Mr. TMG and I drastically decreased (but didn’t completely stop) our retirement contributions and savings to focus on paying off our debt.

We save a little each month, but all our extra money goes to debt payments.

Choose one financial goal to direct your energy and resources to. Your focus will accelerate your progress, and you’ll accomplish your goals faster.

2. Know your “why.”

Most people set goals without ever considering why they want to achieve those goals.

When setting your financial goals, consider the “why” behind them. Knowing why you want to achieve a particular goal is the most important consideration and is vital to your success.

Your “why” will help you to push through setbacks and lagging motivation.

Unexpected repairs, job loss, medical bills, and other problems might throw you off track for a little while, but when you keep your “why” in mind, nothing can stop you.

Similarly, when it seems like it will take forever to accomplish your goal—like Mr. TMG’s and my goal to pay off over $670,000 in debt—your “why” will push you to keep going when your determination wanes.

If your only motivation is money, you’ve already lost. You’ll have no resolve to keep going when life is throwing curveballs and beating you down. You need something greater.

In many ways, your “why” is the ultimate goal. The goal you set is just a means to an end.

3. Set realistic goals.

Don’t set yourself up for failure by setting unrealistic financial goals. Your goals at minimum should take into account your current financial situation.

For example, if you make $50,000 per year, a goal to save $1,000,000 within a year is unrealistic.

At the same time, though, your goals should be a bit outside your comfort zone.

When setting a new financial goal, think about what you can comfortably do, and set your goal just beyond that. This forces you to push yourself and to get creative in figuring out how to achieve the goal.

4. Write your goals down.

Please don’t underestimate the power of committing your goals to paper.

Dr. Gail Matthews of Dominican University of California conducted a study on goal-setting. The study included 267 people and concluded that we are 42% more likely to achieve our goals when we write them down.

Writing our goals down also forces us to clarify them. When we have only a vague sense of what we want to accomplish, we get nowhere. This ties into the next tip…

5. Make goals specific and measurable, and give yourself a deadline.

A general goal without a deadline is really just a wish. An example of this kind of goal is, “I’m going to save more.”

Saving more is a great goal, but…

What is your frame of reference for what qualifies as “more”? If you save an extra dollar, is that okay?

How long will you save more? How will you know when you’ve accomplished your goal?

A better way to frame this goal is, “I’m going to save $10,000 by the end of the year.”

By making it specific and measurable, we know exactly how much we’re aiming to save, and we can easily determine when we’ve reached the goal.

Further, by giving ourselves a deadline, we can formulate our plan of attack, which brings me to the next tip…

6. Break goals into smaller pieces.

Our example goal of saving $10,000 by the end of the year may seem out-of-reach. That’s a lot of money.

$10,000 over twelve months (let’s pretend we’re setting this goal on January 1) is $833.33 per month.

That feels a bit more doable. You can save money from your paycheck, get a side hustle, sell things around the house, or some combination of these things.

Break your goals down into more manageable pieces, and take it one step at a time. Before you know it, you’ll have accomplished your goal!

7. Share your goals with a friend (or the entire internet).

Dr. Matthews’s study also showed that over 70% of participants who shared their progress on their goals with a friend actually accomplished or made significant steps toward accomplishing their goals. Only 35% of those who kept their goals to themselves reported the same success.

Telling others what you’re trying to accomplish may be tough because you don’t want people to know if you fail.

For this reason, though, sharing your goals motivates you to work harder to make them happen. If you keep your goals to yourself, it’s easier to make excuses.

This is where you guys come in for me. I’ve already told you about our debt payoff goal, and I plan to update you on our progress to help us stay accountable!

8. Celebrate your small wins.

You won’t accomplish your financial goal overnight. Celebrate your small wins on the journey to accomplishing your ultimate financial goal.

Going back to our example goal of saving $10,000, you might celebrate for each $1,000 you save.

Taking the time to acknowledge and celebrate your progress will motivate you to keep going.

What are your financial goals? Any tips I forgot?