Do you ever struggle with follow through? Setting financial goals sounds like a great idea, but sometimes it can be difficult to actually accomplish those goals. I want to help you out with some simple tips for how to set financial goals AND actually accomplish them.
One of the big financial goals we set several years ago was paying off our house. It felt huge and a little scary, a little exciting, and a lot “I can’t believe we are doing this”!
Since we achieved that milestone 3 years ago, a lot of our financial goals have been house projects and of course the always the need to put aside money for things like “new” vehicles when the time comes.
If you need help coming up with financial goals you could set, here is a great list of ideas!
I’ve found have a goal and a plan to be key actually getting things done. If you don’t have a budget you need to start there, because I really do think a budget is a key to financial success.
Now, I’m going to share some great suggestions to help you with setting financial goals for your family. I’ll also share some of the process we went through when deciding to pay off our mortgage early.
How to Set Financial Goals:
1. Discuss the Options
Sit down with your spouse and discuss big saving projects you have or any debts that you need to pay off.
Mortgage, loans, car funds, remodeling projects, college funds, retirement fund, emergency fund, investment opportunities, and travel are all ideas to get you started. (For a more extensive list, check out this post.)
2. Pick a project
Let me give you a recommendation here.
If you don’t have an emergency fund, start there! Dave Ramsey says $1,000 but I’d highly recommend $2,000.
If you have an emergency fun be sure to tackle any debt (besides your mortgage) next.
After you both of those things are done, look at bulking up your emergency fund to 3-6 months of basic living expenses before you move on to paying of your mortgage or other savings goals.
We were debt free with the exception of our mortgage. We had recently purchased a new to us mini van and still had a little money in a car fund that we continued slowly adding to in case our other vehicle needed replaced (with an inexpensive vehicle).
Our emergency fun was fully funded emergency funded and we have no known major expenses coming our way. Yes, our retirement fund and kids’ college accounts could have also use more but we went for paying off the mortgage knowing that not having that would free up more money to budget with each month.
3. Look at the Numbers
Start crunching numbers!
- What is the total dollar amount needed?
- Rework your budget or find a side job and see what money you can throw at it.
- When do you think you can have your goal accomplished?
When we knew paying off the house was a huge goal of ours, I spent some time looking at the numbers.
Seeing how much time we had left paying off the house as is and then seeing when we’d be done if we put all of my paychecks and extra money towards it was motivating.
Seeing the numbers and looking at dates on the calendar made it seem real and possible!
4. Pick a Start Date
It can be easy to get stuck in the planning stage! Don’t do that. Move through the first 3 steps quickly and then pick a start date!
Decide when you are going to start and just do it!
Big goals are hard (and often seem scary). Sometimes you just have to make yourself go for it. Maybe you will start today, maybe it will be one Monday, or maybe the first of the month. Don’t put it off more than that or it’s easy to start losing motivation.
5. Know it Will Be Hard
It’s not going to always be easy. It wouldn’t be a BIG GOAL if it was always easy.
Expect challenges, prepare yourself for them, know it’s not going to last forever, and commit to it 100%! Realize there will have to be sacrifices. You will have to say no to a lot of things. Prepare for this ahead of time and realize it’s okay.
6. Have an End
As you are setting your financial goals, be sure to have an end date!
Goals are hard to keep tackling when those hard moments happen if there is no end in site.
You can have two types of ends:
- time (a date in the future when you’ll be finished)
- dollar amount
When we paid off our mortgage, I knew both. I knew how approximately how many months it would take to pay off our mortgage and I also saw the dollar amount owed decrease each month.
7. Celebrate the Milestones
Saving up $10,000, $25,000, or $100,000 is daunting! Sometimes, even the thought of $1,000 is overwhelming.
It might seem like you’ll never get there.
To help keep the end in site and the momentum going, break your goal down and celebrate the mile markers along the way.
It doesn’t have to be anything big (you are on a budget after all).
- Have a family game night, complete with homemade ice cream
- Have a picnic at the park
- Rent a movie and pop some popcorn
Do something your family would enjoy that doesn’t cost much (or any) money.
8. Visual Reminders
Keep the goal in front of you! Don’t shove it in the back of your mind where you will forget it.
- Make a paper chain with one ring for every thousand dollars. When you put in $1,000, remove a chain.
- Draw in outline of whatever you are saving for or paying off and section it into parts. Divide your total needed by the number of parts on your outline and color in a section each time you reach that amount.
Having even simple visual reminders and being able to see the progress can keep you motivated!
9. Plan a Party
Plan something fun that you want to do when your goal is 100% met!
- Go out to your favorite restaurant
- Take a day trip to the zoo or amusement park
- Buy everyone’s favorite foods at the grocery store that haven’t made the budget cut the last year.
Make it fun and something to look forward to. When we payed off our house the kids were just turned 5, almost 3, and I was 9 months pregnant. I was all about keeping things simple. My family loves pizza, so we celebrated with homemade pizza with pepperoni in the shape of a house and a cookie cake the kids helped decorate with a house made from sprinkles. Super simple and cheap but my young kids though it was the neatest thing ever.
Don’t expect it to be easy, but with these 9 steps on how to set financial goals you can select a goals and start tackling it with confidence!
I’m cheering you on. I’ll never forget that moment we sent that last payment and again when it was posted on our lender’s website that we owed $0!
Do you have any tips for successfully setting financial goals? What goals that you are trying to nail this year?
Linking up to these fun parties!