How to Set Financial Goals

Adulting is a hard thing to do. Getting a job, paying bills, saving for the future– all of these involve money. It can be pretty daunting to think about money– and how overwhelming can it be if you do not know how to handle it.

Setting financial goals is the first step in becoming financially responsible. Some examples of financial goals are paying off student loans or credit card debt, saving up for a house or a car, or having an emergency fund. These are goals that entail determination and discipline with time and money.

Almost all of your decisions influence your goals such as saving up loose change you have at the end of each day or deciding to opt for homemade coffee than buying at a coffee shop.

Here are some steps on how to set financial goals:

1. Identify what financial goals you would like to set
There are three types of financial goals: short-term, mid-term, and long-term. All of these are time-sensitive as they rely on how achievable they are in a given time window.

● Short-term financial goals

Short-term financial goals are usually achieved within a year or two. Some short-term goals are repairing and/or improving your home or car, saving up for a vacation or an event. These are expenses or investments that are adjustable depending on how you spend or save your money.

● Mid-term financial goals

Mid-term financial goals are within the timespan between a short-term and long-term goal. Some of these include paying off student loans, buying a car, and paying for special events such as weddings.

● Long-term financial goals

Long-term financial goals are what weigh the heaviest. These can take up to 15 years or more in order to achieve it. Saving money for a new business, paying off your mortgage, having a retirement fund are considered as long-term goals. It requires patience and persistence to really achieve this type of goal.

2. Prioritize

Decide on how to allocate your budget. It is important to know what to prioritize without having your daily needs getting affected. Prioritize your usual daily needs which are your food and housing. Skimping on your daily needs can affect you greatly. If you do not take care of yourself, the consequences might be costlier.

3. Learn how to budget

This can vary depending on you and how you want to plan out your financial goals. A famous and basic budgeting technique is the 50/30/20 in which you allot 50% or half of your income for necessities such as paying the bills, 30% of your income for things you want or leisure such as entertainment or splurging on your favorite food, and 20% to your financial goals. This is just a starting point on how you would want to allocate your income.

4. Utilize resources

In this day and age, technology can be put to your advantage– some of which are already in the palm of your hand: your smartphone. Thousands of applications already exist for various uses, and some of these can help you in achieving your financial goals. Using a budgeting app can help you monitor your daily expenses. If you are the old school type, pen and paper will do as long as you track your expenses and budget.

Another type of resource is to have more than one source of income. You can start a business that you can earn with your hobby that can be of your enjoyment or even getting a part-time job.


Money may seem like a tough thing to save, but you’ll be thanking yourself in the long run. The first step is to start then keep the ball rolling. You may encounter setbacks but do not be discouraged and just stay patient and disciplined.