How to Set Financial Goals that Stick


I love goals. Vision boards, New Years resolutions, clean eating challenges—I’m constantly creating new goals. But financial goals? It took a while for me to grasp the concept that you can have goals, other than the standard “save your money so you can someday buy a house and retire” goal. While important, that type of goal felt distant and non-tangible. 

But when I found myself in over $100k of student loan debt and no real plan to get out, I realized that I needed to figure out how to painlessly set some financial goals for myself that I could actually keep. After a bit of time with my calendar, calculator, and Pinterest, I created goals that I not only have stuck by but I have actually enjoyed achieving each month.

Here’s the process I used to set goals that stick.

Step 1: Create short, medium, and long term goals for what matters most

The first step is to write out the financial goals you have, split into categories based on length of time. The general rule of thumb for timelines is short (less than 1 year), mid (less than 5 years), and long (5+ years). This can include anything – nothing is off limits. This exercise is about getting crystal clear with what your goals are so you can work toward achieving them. 

Some examples of goals you might include on your list are:

  • creating an emergency fund of 3-6 months of expenses
  • paying off credit card and student loan debt or saving for grad school
  • saving for retirement or a down payment on a house
  • saving for a vacation, new furniture, or another big purchase

Get as specific as you can with each goal and include both the total amount and when you want to reach the goal. For example, my goal was to pay off my $110,000 loan in 3.5 years (42 months). Being really specific with this goal was key to making my plan. If you are saving up for something that you don’t have an exact cost for, like a vacation next year, come up with a good estimate of what you think the total expense would be.

Though perhaps not as exciting as other goals, you should always have retirement as a long-term goal. If you’re not sure where to start with estimating how much you should save per month, there are resources that can help. The Center for Retirement Research at Boston College found that if you begin saving 15% of your income at 25 you’ll be able to retire at age 62 and replace 70% of your pre-retirement income. If you wait until age 35 to start saving, you’ll need to save 24% of your income to retire at age 62. 

You can also use an online retirement calculator like this one from Vanguard to get a better estimate of your personal savings needs. 

Step 2: Get motivated

It always helps to add emotional or visual components to your goals to make them feel tangible and to keep you motivated. This extra step kept me focused on limiting my unnecessary spending vices so I could put the extra cash towards bigger and better goals, ultimately making me happier.

Next to each goal, write down why this is important. For my student loans it was important to me to pay them off so I could feel more secure and able to take different risks like moving abroad and starting a new career. Recognizing that the goal represented more than just money helped me commit wholeheartedly to achieving it and kept me from buying another pair of boots that I probably didn’t need.

Another way to motivate yourself to reach these goals is to start a Pinterest board with images that represent each goal. I almost obsessively pin images of what I hope my house someday looks like. These images aren’t just pinned in vain. I have a goal related to saving for a house and stockpiling these images makes the long process of saving feel a bit more real.

Step 3: Calculate the monthly amounts needed to reach these goals

In this step it’s time to get real with what you will need to set aside monthly. You’ll take the total savings goal amount divided by the number of months you are giving yourself to achieve the goal. The result will be the amount of money you should save each month.

For example, if you have a goal of saving $10,000 over this next year for your emergency fund, you would take $10,000 / 12 months = $833 per month that you need to save for the next 12 months in order to reach that goal. Do this for each goal on your list. 

Step 4: Prioritize your goals

Now that you have a list of goals with the timeline, monthly amount you need to save, and your motivation for saving, it’s time to prioritize the list. You can’t always do everything all at once, so being clear on your priorities will help make sure that you’re making room in your budget to achieve the goals that are most important to you (hint: retirement and debt repayment should almost always stay at the top of your prioritized list). 

In an upcoming article we’ll show you how to use these financial goals to create your monthly budget.