How to Set Achievable Financial Goals

Whether the goal is improved fitness, stronger relationships, or greater financial stability, identifying exactly where you want to go is crucial to getting there. Research on goal setting by renowned psychologist Edwin Locke supports this idea: people tend to be more motivated and productive when striving to reach specific and challenging goals.

In financial terms, some people believe improving their situation simply means spending less and saving more. But without clear objectives, it’s difficult to know how much to set aside, and for how long. In addition, holding yourself accountable in the absence of those objectives can be incredibly challenging. That’s why setting specific financial goals is so important.

But how do you set goals that will stick? People with fitness goals might put an aspirational photo on the fridge as a visual reminder. Others jot down short messages on sticky notes and revisit them each morning. Over the years, vision boards — collages of images illustrating your ideal life — have also become popular. Digital versions can be built on Pinterest, and Instagram has tens of millions of posts under the hashtag #goals.

There’s nothing wrong with these motivational tactics as long as you understand the vision — the future you wish to create — is just the beginning. The next step is to break it down into clear goals, actions, and timelines that reflect what is important to you and encourage productive behaviors.

How to Pursue Financial Goals Using the SMART Method

When setting financial goals, consider the popular acronym SMART, which stands for specific, measurable, achievable, relevant and time-bound:

• Specific: A goal of retiring at age 60 in a two-bedroom condo on the Florida Panhandle with a part-time job is more tangible than simply “saving for retirement”.
• Measurable: “Build an emergency fund equal to three times my monthly income by year-end 2026” is far more measurable than “save money for an emergency fund”.
• Achievable: Make sure your goals are reachable so you don’t get discouraged and give up altogether. Investing $50 per week is more realistic than becoming a millionaire in the next 3 years.
• Relevant: Before committing to an objective, make sure it is meaningful and relevant to you. For example, pursuing homeownership would be premature before you’ve paid off excessive debt and accumulated emergency savings.
• Time-bound: Keep yourself on track with deadlines and progress checks. Time-bound goals help you stay focused and accountable. Paying off a credit card in 2 months is more immediate — and easier to track — than just paying it off “as soon as you can”.  

It’s also helpful to distinguish between short-term and long-term financial goals. Short-term priorities might include paying off debt or saving for a specific home repair, while long-term goals could include buying a home, planning for retirement, or building a college fund for your children. Making these distinctions can help you prioritize your efforts and build a more balanced financial plan.

Lastly, work with a professional. At First Command, you’ll receive coaching from qualified financial advisors trained to help military families develop positive behaviors that can serve them well through every stage of life. You’ll work face-to-face with an Advisor to create realistic goals and build a personalized plan for pursuing them. Get started today by scheduling your initial complimentary consultation.