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Achieving financial goals takes a little more than just luck.
It requires extreme discipline, dedication, and repeated sacrifice.
It means setting short- and long-term financial goals and then following through on them.
Unfortunately, these are things with which the majority of Americans seem to struggle.
But research suggests that simply writing out a list of financial goals makes a person 42 percent more likely to achieve them.
Although some people do win the lottery or come into a large settlement, odds are that person won’t be you. Don’t wait for financial success to come knocking. Affording a house, the kids’ college tuition, and, ultimately retirement, will most likely be on you.
Lucius Seneca’s quote is as true today as it was in ancient Rome: “Luck is a matter of preparation meeting opportunity.” It means that every person is responsible for creating his or her own fortune.
Opportunities for success are more likely to come to those who have a clear financial roadmap and who set realistic financial goals.
18 Personal Finance Goal-Setting Activities
Whether the objective is to get personal finances back on check or to save more money, consider the following examples of personal financial goals. Many of these can be started immediately.
1. Build an emergency fund
A money goal won’t be worth anything unless you first set aside funds in case of an emergency. Since it’s impossible to know what life will bring, keep a little extra stashed away at all times. According to Certified Money Coach Megan Robinson, an emergency fund is “a savings account set aside specifically for those ‘just in case’ situations.”
Most experts recommend keeping at least three months’ worth of living expenses in a separate emergency savings account – more, if possible. Don’t let an unforeseen expense ruin an otherwise healthy financial outlook.
2. Boost a low credit score
One of the most popular items on this list of financial goals is how to improve a low credit score. That’s not as hard as it might sound – but it is a long-term financial goal that is going to take some time.
First, check your credit score for free with Credit Sesame.
In a hurry? These four things can help raise a credit score quickly:
- Pay off a chunk of a credit card or loan balance to reduce the utilization ratio (UR)
- Ask for a limit raise – ironically, this can also reduce the UR
- Correct report errors – according to the FTC, nearly 20 percent of credit reports contain errors
- Join another card-holder’s existing account (this further reduces the UR, and that person’s score may give you a boost)
3. Get a side hustle
As of 2017, 44 million Americans have a side hustle – and of those who do, 36 percent report making $500 (or more) per month from theirs. That’s a decent amount that could put a big dent in the average person’s monthly bills.
Some of the more popular side hustles currently include paid surveys, mystery shopping, and blogging. Survey Junkie is one of the quickest paid survey sites, and it allows users to accumulate cash for their efforts.
Another survey site to try is Swagbucks. Complete a survey and receive SB points that can be put toward gift cards or cash.
People with a knack for telling stories can even start their own blogs on WordPress and host them with HostGator in as little as 10 minutes (and for less than $3 per month). For the cost of a cup of coffee a day, give blogging a try and potentially more than $25,000 per month.
4. Read three personal finance books
Make it a short-term goal to read a few good personal finance books. Knowledge truly is power!
There are many places where quality information on reaching smart financial goals is readily available. Some must-reads include:
5. Automate investing
Technology has come a long way in the 21st century.
6. Be health-focused
According to CMS.gov, the average American spent $10,345 on healthcare in 2016. That is an incredible amount of money to pay to stay in good health. But choosing a healthy lifestyle can actually reduce overall spending, as well as being a wise physical choice.
Those who are hoping to lose a few pounds should check out HealthyWage, which will pay users to lose weight. The only catch is that customers will owe them if they are unable to reach their health goals. People who are looking for a little extra motivation could win up to $10,000 through this app.
7. Get out of debt
It is vitally important to focus on getting out of debt. This doesn’t mean that everything else on a list of financial goals is unimportant, but debt can be truly damaging to the goal of achieving financial independence.
Don’t become a victim to a vicious loop of minimum payments and accrued interest. Putting off the bills will only make them harder to eliminate – and worse yet, be ruinous to a credit score, in the meantime.
Jeff Rose, a certified financial planner at Good Financial Cents, has listed some no-brainer reasons for getting out of debt:
- “Getting out of debt means that you will have full control over your income
- “It will leave you with more money for savings and investing – and even more for spending
- “It will make it easier to quit a job you don’t like
- It will free your mind of the worry and stress that come with debt.”
8. Keep accurate records
If merely writing down your financial goals makes you 42 percent more likely achieved them, it goes without saying that accurately tracking spending creates a further sense of accountability. Creating a money journal of sorts will help you track past successes (and failures), learn from past mistakes, and identify areas for improvement.
Plus, tracking goals will then be a breeze because you have reference points and objective data from which to draw conclusions.
- Money of Budgets Are Sexy doesn’t keep a journal, but he does track his net worth via his blog, where readers can follow along. The blog also makes him several thousand dollars per year.
9. Create (and follow) a budget plan
According to a recent Gallup poll, 32 percent of people have actually attempted to create a budget. And that’s great. But what is stopping the other 68 percent?
Taking the time to categorize spending can be a huge eye-opener. The majority of money should go to the housing/car/loans section instead of the latte, Dolce, and Rolex department.
A good budgetary guide is the 50/20/30 rule. According to this plan, 50 percent of all regular income should go toward essential spending (rent, transportation, utilities); 20 percent should be put toward personal financial goals (saving or paying off debt); and 30 percent is flexible (expenses that can vary from month to month, like eating out, groceries, shopping, hobbies, entertainment, or gas).
10. Avoid large, unnecessary purchases
This one is pretty self-explanatory, but continues to be a huge money problem for many people. It should be common sense that a family that is netting $1,200 per month after taxes cannot afford a $450 monthly car payment (think the 50/20/30 rule under No. 4 above), no matter how badly dad wants that new Camaro.
Stop making large, unnecessary purchases. Be willing to use an older phone, for example, instead of buying the new one as soon as it comes out. Define what is important and cut out the rest, instead of adding to your rising debt. Saying no to a want that isn’t a true need is hard, but is the sort of discipline that will truly change your financial outlook.
11. Save on utilities
Just because everyone needs to spend money on utilities doesn’t mean that utilities have to be high. Look for ways to save electricity and slash those heating and cooling costs.
Reduce your cable bill and get rid of infrequently used paid channels like HBO or sports packages.
Be frugal. It is possible to save hundreds of dollars each month by cutting costs on mandatory expenses.
12. Learn a new skill
Accepting the status quo will never help to change negative circumstances. You have to want change enough to make it happen. And learning a new skill will provide just that opportunity.
Improve your skills at work – or switch to a new area of expertise entirely. There are many opportunities to learn a second skill at home while holding down a full-time job. This can be time-consuming, and will require a lot of hard work, but it will pay off.
Caitlin Pyle of ProofreadAnywhere made more than $43,000 by working as a freelance proofreader in her spare time. She even had the time (and money) to go on several fun vacations when she wasn’t working.
After she found success in that line of work, she decided that she wanted to teach others how to do the same thing; so she started up Proofread Anywhere.
Sign up for her free workshop to learn more about making money as a proofreader.
Goals 11-15 above all have something in common: They all pertain to automation.
What’s so great about automation is that it directly addresses the one thing most often responsible for ruining your finances:
Financial automation is a beautiful thing. It doesn’t make mistakes. It takes the human (emotion-based) part of money attachment out of the equation and operates with objective efficiency.
Set a primary goal of automating finances in two ways during the next 30 days.
Some ways of achieving this include:
13. Set up appropriate overdraft protection
Not much is more reckless than over-drafting and having to pay a fine. Avoid this loss by spending 10 minutes at the bank and linking your savings and checking accounts to provide a little added cushion in case things get tight.
14. Set a loan in repayment to auto-pay
Lenders often offer a reduced interest rate on loans merely for setting up auto-pay.
Rather than write a check to the lender each month, they will automatically deduct the loan payment from a linked checking or savings account.
15. Automate your savings
Employers almost always offer the option of splitting direct deposit payments into multiple accounts.
Draft a budget and determine the amount to place into savings; then ask human resources to allot a certain percentage of each paycheck to a high-yield savings account that is separate from the traditional spending account.
The reduced ease of access to the money will help resist the urge to spend.
16. Set bills to autopay
Setting bills to auto-pay is a great way to save time, money and hassle – provided a good budget has been put in place to accommodate it.
This will mean no more utilities’ threatening to cut services for missed payments, as well as fewer credit hits for forgetting to pay monthly credit card bills. Knowing that bills are paid on time – and in full – every month will offer great peace of mind.
An hour’s worth of work on this could eliminate a lifetime of headaches. And, since many companies often incentivize users to sign up for auto-pay by advertising reduced rates and discounts on future products, why not get a discount for doing it automatically?
Every little bit counts.
17. Eliminate expensive habits
Alcohol, tobacco, firearms, and gambling are four things that many people just can’t avoid. They are all addicting to various degrees, and are all pretty expensive (per the ATF, the average American household owns 8.1 guns).
Check out these surprising figures:
- The average smoker spends more than $2,000 per year ($5,000-plus in New York).
- The average adult spends more than $500 per year on alcohol.
- American households spend $162 yearly on lotteries on average; for low-income households, that figure is $289, and for those who make less than $10,000, it’s $597, or approximately 6 percent of their yearly income.
If money seems to be disappearing at an alarming rate, start by looking at this category to see what can be eliminated.
18. Get more organized
Tools like Personal Capital track and organize finances while providing the most advanced technology in personal finance. Get a transparent view of all accounts through the Personal Capital Dashboard, coupled with expert advice and financial planning services – all in real time.
The biggest benefit to a tool like this is that it provides a great overview of the individual’s overall financial health. From net worth tracking, to fee elimination, to retirement planning, goal achievement becomes a lot easier when it’s possible to eliminate separate logins for each account.
The most important takeaway from this discussion is this:
Merely writing down your money goals makes you 42 percent more likely to achieve them.
Drafting a list of financial goals is a great way to prepare for financial success. Stop wishing that finances were better, and actually do something to make them so by setting different types of financial goals.