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How to Set and Reach Your Financial Goals

Anybody can have dreams. But it takes guts to turn those dreams into goals and get things done. Are you ready to get things done with your money—to set and reach your financial goals?

Part of being an adult is realizing there’s no fairy godmother who makes your money wishes come true. You’ll have to work to reach these financial goals. But you can do this—because it’s worth it.

What Are Financial Goals?

Before we dive in, let’s break down what financial goals even are. You probably plan out other life goals (especially around the new year)—things like getting fit or healthy, becoming more intentional with your time, or learning a new skill. But what about starting healthier, more intentional money habits?

Financial goals are where you want to be with your money in the next five, 10 and 20 years. Or even next year. You’ve got to think about the big and small things when you’re writing out your goals.

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And yes, you have to write them out. Goals are dreams in action. And the first step to putting them into action is writing them down. When you put goals into words and keep them in front of your face as both a reminder and a motivation, you’re bringing them to life. So, give your financial goals breath. Write them down.

10 Examples of Financial Goals

Okay, it can be hard to narrow down which financial goals are right for you. Where do you even start? Start here—with this list of 10 financial goals:

1. Create and stick to a budget.

Not only is budgeting one of the top 10 financial goals people set each new year, but it’s also the foundation you should build all other money goals on.

That’s because a budget is a plan for what you’ll do with all your money. It’s a plan for what’s coming in (income) and what’s going out (expenses). When you do it every month, you’re giving your money purpose. You’re telling your money where to go so you don’t end up wondering where it went.

This is how you’ll gain momentum in every area of your finances. If you’re already budgeting—bravo! If not, get started so you can knock out all your other money goals.

2. Build up an emergency fund.

Life happens. But you can be prepared for any money problems that come your way if you’ve got money saved up. We’re talking car trouble, medical expenses and busted toilets—some of the worst parts of being an adult. But when you have an emergency fund, you can rest well at night knowing you’re able to stand up against a financial threat without being beaten.

Start with the financial goal of having $1,000 in savings. Then, if you have debt, pay it all off (that’s the next goal we’ll dive into). After that, build up a fully funded emergency fund with 3–6 months of expenses.

When you’ve got an emergency fund, you’re ready for those “life happens” moments. Instead of living in worry of what could happen next, you’ll be living with confidence.

3. Get out of debt.

It’s time to get serious about crushing debt. For. Good. Because debt’s good for one thing and one thing only—holding you back. And you don’t have time for that crap. Sure, plenty of people are still living on credit cards and taking out car and student loans, but you don’t want to be like them. And those credit card companies say you they’ve got your best interest in mind. Um, more like the 16.43% interest they’re making off of you.1 Remember: Every payment you make to debt could be cash you’re stacking up toward your other financial goals.

It’s time to shout from the rooftops (literally or figuratively): “Debt sucks!” Then live like you mean it! Check out this debt calculator to see just how quickly you can say goodbye to those payments for good.

4. Live on less than you make.

The best way to get ahead is to stop getting behind. It’s not rocket science. It’s common sense.

Getting ahead with your money is possible—and it’s a perfect financial goal to aim for. You just have to start living on less than you make. So, what does that mean and how do you get there?

It means you spend less money than you’re paid each month. Then, you can put any money that’s left over toward whatever Baby Step you’re on. The Baby Steps are our proven plan for winning with money. They cover saving, getting out of debt, and building wealth. See how all those things help you get ahead and move forward with your money?

5. Spend less and save more.

Another way to get ahead is by becoming more intentional about your spending. Budget every month, meal plan, find deals, use coupons, pay cash, and—to be perfectly blunt—learn to say no to stuff you don’t need.

Here’s something that can make it easier: When you’ve got custom budget reports (a feature of the premium version of EveryDollar inside a Ramsey+ membership) you’ll get a monthly snapshot of your spending habits. Then you’ll know immediately where to tighten the spending reins so you can line up your money habits with your money goals.

6. Save money to pay cash for big items.

Being intentional with your money doesn’t mean you can’t ever make big purchases. It just means you need to have a plan for them. Cars, furniture, technology—these things can get expensive. But having dollar bills in hand to pay for these items—in full—is a fabulous financial goal. This puts you in the driver’s seat, steering you toward owning things rather than owing for things.

7. Stop living paycheck to paycheck.

So, 78% of Americans live paycheck to paycheck.2 That means all their money comes in and goes right back out. That might not sound so bad at first. It might sound like a win because they’re able to stay on top of bills, at least. But if all they’re doing is staying on top of that month’s bills, there’s no way to look to the future—because they just can’t afford to save any money yet. Living like this is about as secure as using a parachute made of cotton candy. It won’t hold up or keep you from crashing to the ground.

If you’re stuck in this cycle, know you don’t have to stay here. Seriously. Guess what will get you out? Making a plan with your money! Don’t settle for the “not so bad” reaction you might‘ve had to the idea of living paycheck to paycheck. Go for great. You’ll gain security like you’ve never known.

8. Pay off your home.

Home is where the heart is. It’s also usually your largest monthly expense. We specifically recommend spending 25% or less of your take-home pay to cover your mortgage plus tax, insurance, HOA fees, and private mortgage insurance (PMI).

Now, take a moment to imagine getting about 25% of your income back to spread out over your savings account, travel fund, favorite charity, home-improvement bucket list, and retirement account. That’s what happens when you pay off your mortgage. And that’s why this is a fantastic goal. The work is hard, but the payoff is more than worth it.

9. Save up funds to help your children pay for college.

One of the greatest financial myths of today is that it’s not possible to go to college without going into debt. And it’s one heck of an expensive myth. Because guess what? A debt-free degree isn’t just possible—it’s the only way anyone should go to college.

First of all, don’t feel pressured to make or meet this money goal. But if you’re financially able, helping your children pay for college would be an incredible blessing to give them. 

Whatever you do—never take out a loan or let your kid take out a loan for college. That’s like digging a hole that can take up to 30 freaking years to climb out of. No. Thank. You.

10. Live your retirement dreams.

As you imagine your golden years, what do you see? Do you want to pack up an RV and see all of America? Read every book on your shelves? Take up a dream hobby you’ve always waited for until you had the time and money to really do it right?

No matter what you picture this future looking like, you’ll need money to make it happen. When you stop working, your income goes away. So, having a financial goal in place to replace that paycheck with retirement investments isn’t just nice—it’s necessary!

Why Is It Important to Set Financial Goals?

If you don’t set goals, things won’t change. You’ll stay right where you are—in the land of wishful thinking. And while that’s a fun place to have some daydreams, it’s no place to live.

Financial goals give life and direction to your dreams. Don’t kill your dreams. Instead, set financial goals to help you reach them!

How Can You Achieve Your Financial Goals?

Write out your goals.

We said it once, and we’ll say it again: You won’t put your goals into action if you don’t write them, speak them, see them. So, get to it. Now! If you need help shaping your dreams into real-life goals, get the Ramsey+ Goal Getter’s Guide.

Create accountability.

Find a trustworthy person to talk through your goals with. This needs to be someone who’ll give you a reality check and encouragement along the way—someone who’ll check in on your progress and cheer on your accomplishments. Having accountability means you don’t leave your dreams on your own shoulders—you pick someone to help you carry the load.

Use the 7 Baby Steps to guide your goals.

If you look over that list of 10 financial goals, you might feel a little overwhelmed. Where exactly do you start? What comes next when you decide you’re ready to make these goals a reality?

Use the 7 Baby Steps we mentioned earlier. Walking this financial journey all the way to retirement is a long and winding road, so you should take one (baby) step at a time.

Track your expenses.

Remember: A budget gives your financial goals direction by giving your money direction. But you can’t just set it up and leave it alone. That’s like adopting a puppy, telling it not to chew up your shoes, and then leaving for work. That puppy’s going to chew up your shoes. And the rest of your house. That’s what untrained puppies do.

You have to stay on top of your spending by tracking your expenses, and that’s super easy when you have the premium version of EveryDollar—exclusively offered in a Ramsey+ membership (which you can test-drive in a free trial!). With Ramsey+, you connect your budget to your bank account, and your transactions stream straight into the app. You just drag and drop them to their right line.

Keep your shoes unchewed and your spending in check. Train your puppies and track your expenses.

Become more self-aware.

Socrates once said, “Know thyself.” And he knows what he’s talking about. While you’re trying to make these financial goals a reality, remember that your greatest cheerleader and opponent, hero and villain is . . . you. So, in this case, listen to Socrates . . . and us!

Being more self-aware is one of the top keys to crushing any goal. Know your money weaknesses and set up a plan to avoid or overcome them. Know your money strengths and build on them as you celebrate every victory (big and small).

Reevaluate your goals every now and then.

Life changes. People change. Goals can change. That’s okay. Don’t abandon a goal just because it’s going to mean hard work. But don’t hold on to an outdated goal just because you don’t want to feel like a failure. Accepting that you’re heading in a different direction than you once thought isn’t failure. It’s actually healthy!

Reevaluate your money goals every year, every six months—and maybe every month if you want! Never be afraid to make changes so your goals fit where you are and where you’re going.

Make your goals happen.

Goal getters, you’ve got this. Seriously. Whether it’s a new year, a new month, or a random day when you’re feeling motivated to change, you can do it. Goals are dreams with work clothes on. So, get them dressed and ready to come true.

And it doesn’t have to be January 1 for you to turn your resolutions into revolutions. Download the free Ramsey+ Goal Getter’s Guide and make it happen.


Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

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