Creating and prioritizing your financial goals can prove to be difficult sometimes. There are many moving parts to your personal finances and choosing what to do might not always be that obvious. 

And, everyone’s financial goals vary, because your situation will be different from the next person. But as you look to improve your finances, you must create actionable goals that you’ll want to stick with and create a plan to achieve them. 

This article will provide you with practical tips on how you can create actionable financial goals and achieve them. Let’s get started.

• How do you make an Actionable Goal?
• What are Financial Goals Examples?
• What are the Attributes of an Actionable Financial Goal?
• What are the 5 Components of Financial Goal Setting?
• How do you set Actionable Financial Goals and Actually meet them?
• How to Achieve Your Financial Goals

How do you make an Actionable Goal?

Every one of us has goals, but how often do we reach them? Are we just wishing they would knock on our front door?

Read Also: Tips to Help you Meet Your Financial Goals

Achieving your actionable goals might be harder than you think, depending on how big or small they are, but if you take the time to sit down and think about your goals and what steps you can take to attain them, then you are one step closer to that actionable goal!

1. Set definable, concrete, and clear goals

Set goals that are clear and definite, don’t be vague. Be specific. We need to ask and think about each and every one of the following to help us define our goals:

1. What: this should identify the “meat” of your goal. What you want to accomplish?
2. Where: location, if applicable (like getting a job in your local area or moving to a new area).
3. How: you may have a preference as to “how” events will unfold (this may not always be within your control, but a having a general expectation is good).
4. Whom: if your goals involve others, you’ll want to highlight your expectations.
5. When: a general timeline for the fulfillment of your goals.
6. Why: your reasons for wanting to achieve your goals.

2. Use leverage to help define your actionable goal

We have the power of our mindset to leverage a set of positive and negative emotions or outcomes. “You can focus on the wonderful things you’ll experience if you complete your goal (i.e. happiness, personal freedom, finding the love of your life).

Or you can focus on the awful things that might happen if you don’t (i.e. loneliness, a heart attack, or the death of a loved one).” The main question is, “What massive reason can you find to make your goal a must?” Whatever the emotion is behind it, use it to set you on your path to attain it.

3. Break down your goal into smaller parts

You have an actionable goal and have defined it. Now it’s time to break that goal into smaller chunks. These are the baby steps that are going to help you get to your big goal. Take time to write out what these look like for you personally. Whether it’s 5 steps or 15, write them down.

4. Put steps on a calendar

Take out your calendar/planner and start writing down what you want to achieve by the end of a month. Be bold, but also be realistic. For example, if you’re moving, traveling, or have family coming into town in June, then make sure your goal for that month takes the amount of time you’ll have into account. Don’t overload yourself or set yourself up for added stress.

5. Keep deadlines realistic

When we set out on a goal, we usually have very high expectations of what we are going to have completed by a certain time. However, it’s easy to over-commit when our excitement around starting something new is high. There is nothing wrong at all with setting goals that require you to push yourself.

The problems can arise when you set the goal too high for where you are currently at. That’s not an invitation to set them too low, you’ll get bored and not be motivated. Just remember, your goals should be out of reach, but not out of sight.

Focus on your action instead of the result and don’t become emotionally attached to your timeline. Things will happen beyond your control and all you’ll need to do is remember your action towards your goal for that time.

6. Become accountable to your actionable goals

Find an accountability partner to help you with your goals, whether they are big or small. Give him/her a list of your goals, your baby steps towards that goal, and your calendar with your monthly (or weekly) goals attached so he can also keep track with you.

7. Take Action

You have defined your goals, written out your plan of action, placed them on a calendar, and have an accountability partner. But your goals are going to sit on the paper or on your computer until you take some sort of step.

So, it’s time to be bold and start taking action. What does this look like? Is it researching? Networking? Starting a new hobby or class? Printing business cards? Whatever it is, make it a reality.

8. Routinely review your progress

Try to pick a day and time to review your progress. Reviewing your progress helps you see your goals become reality, each small step at a time. Look over your weekly goals at the start and end of each week and then your monthly goals at the end of the month.

Be proud of yourself when you conquer a baby step and are ready to move upwards on your goal ladder! By reviewing your progress weekly, you keep your dreams and ideas alive instead of being passive on paper.

9. Reward yourself

Celebrate every victory when you’ve accomplished a step! Take time to bask in what you have done and made reality. Go out and have a bite to eat or have some fun. Make time to celebrate once a month and plan the event according to how big or small your accomplishment is. Finished a baby step? Go and get some ice cream.

Accomplished a goal? Have a party and be sure to invite your accountability partner! After your celebration time, start working towards another goal and celebrate all the baby steps with that one too.

By putting these tips into practice, actionable goals will be within reach and your dreams will come alive! You’ll be more organized, productive and motivated too. So start thinking, planning, doing and creating those actionable goals!

What are Financial Goals Examples?

Financial goals are objectives or milestones that you want your money to cover at a specific time. Whether it’s building an emergency fund, becoming debt-free, or going on a fabulous vacation, your financial goal needs to be clear. Keep in mind that your financial goals don’t have to be tied to purchases, they can be:

• Living a more minimalist lifestyle
• Earning a certain amount of money through a side hustle
• Becoming a millionaire by the age of 40
• Giving a certain dollar amount to a worthy cause
• Shifting from a scarcity to an abundance mindset
• Earning more money from your job

You however don’t want to confuse a financial goal with a process. A financial goal will tell you what the end result will be but having a good financial plan will ensure you reach your goal. The very first step in getting what you want is to decide what it is that you want.

Examples of financial goals by timeframe

Now let’s get into some examples of financial goals that you can leverage based on the timeframe in which you want to achieve your goals.

Short term financial goals: 12 to 24 months 

Money for short-term financial goals should be easily accessible and is best kept in a savings account. You can decide to contribute to these savings account on a paycheck basis or monthly basis.

Any extra money that comes your way like a tax refund, stimulus check, or bonus check can also be earmarked for short-term goals.  Specific examples of short term financial goals include:

• Saving for vacations
• Christmas gift savings
• Planning a wedding
• Home Improvement/Renovation
• Building an emergency fund
• Paying off debt

Midterm goals: 2 to 5 years

Certificate of Deposits or CDs, are a great place to keep money that you might not need right away. Interest rates tend to be a bit higher than your traditional savings accounts. Mid-term financial goals might be a goal that will require more planning and a bit more money than short-term goals. These are goals that you might have for later down the road.

Examples of mid-term financial goals include:

• Saving for a home downpayment
• Taking your family on a dream vacation
• Paying for a car in cash

Long term goals: 5+ years

Long term financial goals will require planning and determination. It’s easy to become overwhelmed with long-term goals if you don’t clarify why achieving the goal is important to you. Because you’ll be on the journey to achieve a long-term goal for many years, for example, having a well-funded retirement it’s easy to lost focus.

By reminding yourself why the financial goal is important to you is key to achieving that goal. Since you won’t need the money right away, consider investing any money you are saving for a long-term financial goal. With low-interest rates on savings accounts, you might consider investing in 529 plans, 401k or Roth IRAs. Examples of long term financial goals include:

• Saving for a child’s college education
• Investing for retirement
• Paying off a mortgage

What are the Attributes of an Actionable Financial Goal?

It’s important to know how much you will need to save and for how long. Recognizing your financial goals and creating a savings plan is the first step to achieving your financial dream.  Be sure that you set SMART goals. These are goals that are Specific, Measurable, Achievable, Realistic, and Time-based.

Here are some examples of SMART goals:

Specific

This means laying out exactly what you want to achieve. E.g. I want to save $30,000 for a downpayment on a house.

Measurable

Essentially you want to determine a unit of measure on how you will track your progress. E.g. I will need to save $500 a month for the next 60 months in order to have $30,000 in 5 years.

Achievable

To achieve your goals, you’ll need to layout action steps to make your goal attainable. E.g. I can do this by earning more money with overtime at my current job or starting a side hustle. Any bonuses will also go towards my down payment goal.

Realistic

You’ll also need to create goals that are realistic based on factors like your income, time, and what you can do. E.g. I will cancel my cable subscription, gym membership, and eat out less in order to help me save. In one year, I will increase my income by $5,000.

Time-based

Finally, it’s important to assign a specific timeframe by when you want to achieve your goals. E.g. In 5 years, I want to be a homeowner. I will be able to achieve having a 20% downpayment for a $150,000 home in 5 years.

Spend time journaling about what you really want and why you want it. Once you are clear about what you want, you’ll be able to prioritize and set timelines for when you want to achieve them. 

Setting your financial goals is a great step but make sure you create a plan so you have the cash to back it up. While cutting expenses is a good start, increasing your income can also be a great way to reach your financial goals.

What are the 5 Components of Financial Goal Setting?

You don’t need a financial advisor to develop your own financial plan. In fact, YOU are the best person to put one together.

When you’re directly involved in mapping out your finances you’ll be more likely to actually stick with your goals. Plus, you’ll have a keen awareness of where you stand financially and what it’s going to take to get you to the next level.

Below awe discus six elements of a strong financial plan.

1. Super Strong, Meaningful Goals

What’s the point of even having a financial plan if you don’t have any goals? There isn’t one.

If you want to make headway financially you need goals that are strong enough to inspire you to action. Goals are what allow you to practice delayed gratification.

For instance, if you have a goal of paying off $3,000 worth of credit card debt in six months, you know that if you spend $30 on a new shirt that you don’t really need, you’re robbing yourself of debt freedom.

Strong goals are what keep me in check. Once I am committed to a particular goal, short term sacrifices are pretty easy to make. Start with strong goals. It’s near impossible to map out a personal financial plan if you don’t have a strong goal to begin with.

2. An Awareness of Income and Expenses

Next comes either the fun or horrid part, depending on your personality. Creating a budget. There’s no right or wrong way to budget. You need to find what works best for you.

Common ways to budget:

The Zero Based Budget – A Zero Based Budget is where you map out where your money is going before you even get it. You’re essentially “spending” your money before it even hits your bank account. With a zero based budget every dollar has a purpose.

Saving From the Top – Another way to budget, which works wonderfully for those of us who don’t like the zero based budget, is to skim from the top. With this style you meet all of your financial goals before you spend any money on bills or other expenses.

For instance, you’ll have money automatically put in your investing, savings, or debt pay off accounts. You’re allowed to spend everything else. This method is also great if you lack discipline. You’ll automatically meet your financial goals without ever having to lift a finger.

There are a ton of different ways to budget. The method you use doesn’t really matter. What matters is that you’re hyper aware of your income and expenses and are able to trim the fat where necessary and move those savings toward your goals.

If you want a FREE tool to help, we suggest Personal Capital to keep track of all your income and expenses.

3. A Large (ish) Emergency Fund

You need a decent emergency fund before starting on other goals like accelerating your debt payoff, saving for a house, or saving for retirement. Emergency funds come in handy and will prevent you from paycheck to paycheck living.

Most financial experts recommend that you have at least 3-6 months’ worth of cash set aside for emergencies. We agree, but ultimately, your emergency fund needs to be whatever makes you feel comfortable.

When saving an emergency fund you can also factor that if you did lose your income your expenses would probably be a lot lower.

4. Savings/Investing/Debt Payoff Plan

After you’ve reached your desired emergency fund amount it’s time to really accelerate your financial goals.

If you have high-interest debt, like credit card debt, paying that off should be your main focus. Once that’s done you can choose to pay off lower interest rate debt or move onto saving and investing. We all live different lives and have different mindsets. We can’t tell you what you should be working on. You need to figure out what means the most to you and then go all in on it.

However, one thing you need to be aware of is retirement savings. You should have a retirement savings plan as one of your goals. You can take all that cash you’ve been funneling toward your emergency fund and spread it between your financial goals.

5. The Right Kinds of Insurance

Insurance is often overlooked in a strong financial plan. The truth is, without the right type of insurance all of your hard work could go down the drain with one accident.

Some insurances that you absolutely need:

Auto Insurance – Obviously, if you have a car you shouldn’t go without auto insurance. If you have a lot of assets make sure that you have high liability limits on your auto policy.

Homeowner’s Insurance – If you own a home you already know how important homeowner’s insurance is. Once again, your liability limits need to be high enough to protect you should someone get injured on your property.

Health Insurance – A major health problem could bankrupt you. This is one insurance that you do not want to be without. If you’re without health insurance I’d recommend that you look into getting an inexpensive, high deductible plan. You’ll pay a lot upfront with a high deductible health plan but in the event of a major medical issue your insurance will save you from financial catastrophe.

Life Insurance – For some reason, it seems that life insurance is the most skipped over insurance out there. If you have a family that you want to protect then you absolutely need life insurance.

Everyone’s situation is different. When factoring how much life insurance you need think of how your spouse/kids would be impacted financially if something happened to you. At the very least you should get enough coverage to pay off your mortgage.

Thanks to technology buying life insurance has become much easier. You can use a site like TermLifeInsurance.com to get term life insurance quotes from dozens of carriers all at once. From there you can see which carrier offers the best prices and apply.

6. Increase Your Income Strategy

Last, but certainly not least, is a strategy for increasing your income.

For a lot of people, expenses aren’t the problem – its income. If you’re making $20,000 per year you’re never going to get ahead. You need to get creative and actively look to increase your income. It takes hard work and hustle but anyone can do it. You just have to have the right attitude.

How do you set Actionable Financial Goals and Actually meet them?

Setting financial goals is important, but how you set those goals is equally important, if you want to achieve them.

Financial goals represent financial priorities that are important to you. These goals may be long-term or short-term in nature, they might represent large amounts of money or a change in behavior.

Setting financial goals is an important step. While setting goals is important, how you set those goals is equally important to ensure that you have a shot at achieving them.

1. Decide What’s Important

Your financial goals should reflect your financial priorities. What’s important to you financially? This should be the foundation of your longer-term financial goals and should be kept in mind when setting short-term and intermediate-term goals.

2. Be Sure the Goal Is Measurable

In order for a financial aspiration to truly be a goal, you need to be able to measure it. If the goal is to accumulate a certain amount of money for a major purchase or for your children’s college education, how will you know if you’ve reached your goal if there isn’t a number attached to it?

3. Be Sure the Goal Includes a Time Frame

Along with being measurable, a financial goal should include a time frame in which that goal should be achieved.

4. Establish a Budget

In order to be able to fund your various financial goals it’s important to establish a spending budget. This will give you a picture of where your money is going. How much do you need to meet your monthly living expenses? How much is left over after your monthly obligations to fund your goals? A budget can also be a tool to adjust your spending if needed.

5. Monitor Your Progress

This is a crucial part of the process. It’s important to keep track of your progress toward your financial goals to ensure you are on track to meet them.

6. Adjust as Needed

Goals can be established with the best intentions of doing what is needed to achieve them, but life can get in the way. Things can change, other priorities can arise. You may need to adjust your goals or make adjustments in other aspects of your spending to get back on track.

How to Achieve Your Financial Goals

Whenever we talk about chasing any financial goal, it is usually a 2 step process –

• Ensuring healthy savings
• Making smart investments

You will need to save enough; and invest those savings wisely so that they grow over a period of time to help you achieve goals. So let’s get down to ensuring healthy savings.

Ensuring Healthy Savings

Self realization is the best form of realisation and unless you decide what your current financial position is, you aren’t heading anywhere.

This is the focal point from where you start your journey of achieving financial goals.

1. Track Expenses

The first and the foremost thing to be done is to track your monthly expenses. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you would be surprised to see how small expenses add up to a sizeable amount.

Also categorize those expenses into different bucket so that you know which bucket is eating the most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pump up your savings rate.

2. Pay Yourself First

Generally, savings come after all the expenses have been taken care of. This is a classical mistake which almost everyone of us do. We pay ourselves last!

Ideally, this should be planned upside down. We should be paying ourselves first and then to the world i.e. we should be taking out the planned saving amount first and then manage all the expenses from the rest.

The best way to actually implement is to put the savings on automatic mode i.e. money flowing automatically into different financial instruments (for example – mutual funds, retirement corpus etc) every month.

Taking the automatic route will make us lose control of our money and hence will compel us to manage in what’s left with us thereby increasing the savings rate.

3. Make a Plan and Vow to Stick with It

Budgeting is the best to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be made.

Nowadays, several money management apps and wallets can help you do this automatically. It’s easy and who knows, you may just end up doing what people fail to do.

At first, you may not be able to stick to your plans completely but don’t let that become a reason why you stop budgeting entirely.

Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

4. Rise Again Even If You Fall

Let’s be realistic. It’s not like the world will come to an end if you made one mistake. This isn’t called leniency but discipline.

If you fail to meet your budget for a month, don’t give up the entire effort just like that. Instead, start again.

Remember that flexible plans are the most realistic plans. So go forward and try to follow your financial goals as planned but if for some reason, the plan gets out of hand for you, do not give up on it just yet. This has a lot to do with your psychology rather than any material commitment.

All you have to do is to stay on the road and vow to stay on it, no matter how much you fall down.

5. Make Savings a Habit and Not a Goal

In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.
Make Savings a habit rather than a goal. While it might seem to be counter intuitive to many but there are some deft ways of doing it. For example:

Always eat out (if at all) during weekdays rather than weekends. Usually weekends are expensive. Make it a habit and you would in turn be saving a great deal.

If you are travelling buff, try to travel during off season. Your outlay will be much less.

If you go out for shopping, always look out for coupons and see where can you get the best deal.

So the key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice which will be harder to sustain over a period of time.

6. Talk About It

Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission. And it would be rather easy to lose the grip over your discipline.

Therefore in order to stay the course, it is advisable that you keep yourself surrounded with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

7. Maintain a Journal

For some people, writing helps a great deal in making sure that they achieve what they plan.

So if you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

Use this journal to write down all essential points such as your short term, mid term and long term goals, your current sources of income, your regular expenses which you are aware of and any committed expenses which are of recurring nature.

When you have a written commitment on paper, you are going to feel more energised to follow the plan and stick to it. Moreover, it is going to be a lot more easier for you to follow you and track your progress.
At this point, you should be ready with your financial goals and would be doing brilliantly with savings; now it’s time to talk about the big daddy – Investments.

Making Smart Investments

Savings by themselves don’t take anyone too far. However savings when invested wisely can do wonders and we are at that stage where we will talk about making smart investments.

8. Consult a Financial Advisor

Investments doesn’t come naturally to most of us therefore rather than dabbling with it ourselves, it is wise to consult a financial adviser.

Talk to him/her about your financial goals and savings and then seek advice for the best investment instruments to achieve your goals.

9. Choose Your Investment Instrument Wisely

Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about them.

Just like “no one is born a criminal”, no investment instrument is bad or good. It is the application of that instrument that makes all the difference.

Do you remember we talked about bifurcating financial goals in short term and long term?

It is here where that classification will help.

So as a general rule, for all your short term financial goals, choose an investment instrument that has debt nature for example fixed deposits, debt mutual funds etc. The reason for going for debt instruments is that chances of capital loss is less as compared to equity instruments.

10. Compounding Is the Eighth Wonder

Einstein once remarked about compounding, Compound Interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.

Read Also: The Ultimate List of Personal Finance Tips

So make friends with this wonder kid. And sooner you become friends with it, quicker you will reach closer to your financial goals. Start investing early so that time is on your side to help you bear the fruits of compounding.

11. Measure, Measure, Measure

All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments; taking stock of how our investments are doing.

If there is one single step where everything (so far) can go wrong, it is at this step – Measuring the Progress.

If we don’t measure the progress timely, then we would be shooting in the dark. We wouldn’t know if our saving rate is appropriate or not; whether financial advisor is doing a decent job; whether we are moving closer to our target or not.

Do measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

Bottom Line

Setting financial goals provides a framework for determining what is important to you financially and what is required to achieve these financial milestones. Just getting a paycheck and spending randomly doesn’t allow you to focus on what’s important to you and your family.

Establishing actionable financial goals, including an amount that is needed to achieve the goal and a timeframe to achieve the goal, allows you to set a plan to meet this goal.

Sticking to your plan for these goals can help shape your attitude towards your finances and help provide a level of discipline that will carry over to all aspects of your financial life. This alone might be a good financial goal for many of us.