William Huston, AIF®, AIFA®

Transform Your Life with these Financial Goals Examples

William Huston, AIF®, AIFA®

William Huston, AIF®, AIFA®

Transform Your Life with these Financial Goals Examples

financial planner and client

In today's world with its ever increasing demands, managing our finances has become even more important. Whether you're striving for financial independence, aiming to pay off your debts, or looking to achieve long-term financial security, setting well-defined goals is the first step towards realizing your aspirations.

By aligning your actions with these objectives, you can make informed decisions, establish healthy financial habits, and ultimately achieve a desired financial future.

In this article, we are excited to share with you a carefully curated selection of powerful financial goals examples that will empower you to take charge of your financial destiny.

Embark on an enlightening journey that will not only enhance your monetary outlook but also provide you with the necessary tools and strategies to build a solid foundation for a prosperous future. Together, let's unlock the door to financial success and witness the incredible possibilities that lie ahead.

Key Takeaways
  • SMART financial goals are specific, measurable, attainable, relevant, and time-bound, increasing the likelihood of success.
  • Good financial goals examples include expanding financial literacy, establishing an emergency fund, saving for retirement and education, building credit, becoming a homeowner, finding higher-paying jobs, and becoming debt-free.
  • Examples of SMART financial goals include saving for a down payment on a home within a specific timeframe, paying off a certain amount of debt within a set time period, and increasing monthly retirement contributions by a specific percentage.

The contents of this article are for educational purposes only. They are not intended to be a source of professional financial advice. You will find experts on financial planning, financial management, and real estate here. More on disclaimers here.

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What is a financial goal?

person setting financial goals

A financial goal serves as a specific target to strive for when it comes to managing your money effectively. Whether it involves saving, spending, earning, or investing, having a list of well-defined financial goals is essential for creating a comprehensive budget. By setting clear objectives, you provide yourself with a road-map for success and make it easier to work towards your desired outcomes.

Financial goals represent the milestones or plans that individuals set for themselves to achieve specific financial objectives within a designated time-frame. These objectives can vary widely, ranging from establishing a fund for their children's education, planning for travel expenses, creating an emergency fund, or ensuring proper healthcare coverage.

By defining these goals, individuals can align their financial decisions and actions with their long-term aspirations, ultimately paving the way for financial security and success.

What are the three types of financial goals?

financial advisor and planner

In terms of investment strategy, there are three distinct categories of financial goals as defined by the Financial Industry Regulatory Authority (FINRA). These include long-term goals, which encompass periods exceeding 10 years, mid-term goals ranging from three to 10 years, and short-term goals that span less than three years.

By categorizing goals in this manner, individuals can effectively align their investment plans and timelines to achieve their desired financial outcomes.

Long-term financial goals

Looking into the future, long-term goals involve securing financial stability during retirement or becoming mortgage-free. These goals are situated further down the timeline, and they often encompass multiple short-term or midterm objectives.

Breaking down extensive goals into smaller, more immediate targets is a wise approach, as it allows for incremental progress and keeps you motivated along the way. By focusing on smaller milestones, you can steadily work towards achieving your long-term financial aspirations.

Short-term financial goals
lady researching on finances

Alongside the narrower, more specific goals that directly support your long-term objectives, it is beneficial to establish short-term goals for things you desire to attain in the near future. These could include endeavors like a bathroom renovation or a trip to France.

It is worth noting that the example provided is purposefully specific, and there is a rationale behind this approach. By setting clear and specific short-term goals, you enhance your ability to plan and take actionable steps towards accomplishing them effectively.

Mid-term financial goals

Mid-term goals include actions like accumulating the premium payment for an annuity that ensures lifelong income, enhancing your credit score, or acquiring the necessary capital to initiate your own business venture. Exploring avenues for generating passive income are also worthwhile considerations.

Each of these examples represents a mid-term financial goal, spanning a time-frame of three to ten years, and acts as a significant milestone on the path towards achieving larger, overarching objectives. These mid-term goals serve as stepping stones towards your broader aspirations.

Benefits of financial goals

successful financial planner

The importance and benefits of financial goals are often overlooked by many individuals. While everyone desires a better financial life, there is often a clash between personal beliefs and societal opinions regarding financial goals. This leads to a significant portion of the population, even in the United States, being indecisive about pursuing financial planning and success.

However, setting clear financial goals can be the determining factor between merely working for money throughout one's life and creating a desired lifestyle. Financial planning plays a crucial role in achieving financial well-being and stability. Engaging the expertise of professionals such as financial advisors or certified financial planners can make a significant difference in the success of your financial planning journey.

The key element lies in the guidance provided by these experts, who can help you eliminate vague and uncertain ideas and instead focus on practical and achievable strategies. By working with a trusted financial advisor or certified financial planner, you can gain clarity and direction in your financial pursuits, increasing your chances of attaining success and realizing your financial aspirations.

What is a SMART financial goal?

a smart financial planning team

While smart usually denotes high intuitiveness and logic, in the world of finance, SMART is an acronym that means: Specific, Measurable, Attainable, Relevant, and Timebound. Hence, beyond an intuitive and logical basis, our financial goals need to be SMART in these senses of the word.

Imagine you have a goal of saving money. This goal is vague and has no marker for success. But a plan to save $2000 for an emergency fund in the next 12 months is more practical and achievable, or to be precise, SMART.

Moreover, the financial world gets more sophisticated everyday. As a result, SMART financial goals are not based on good guesses but up-to-date information. In which case your first financial goal can be to improve your financial literacy everyday.

What are good financial goals examples?

These are financial goals you can personalize:

lading setting financial goals
1. Grow your financial literacy

One of the most crucial financial goals you can set is to continually expand your financial knowledge and understanding. Commit to reading books, attending seminars, and following reputable financial blogs to enhance your understanding of concepts such as budgeting, investing, and managing debt. By becoming financially literate, you'll be better equipped to make informed decisions and navigate the complex world of personal finance with confidence.

2. Reserve money for emergencies

Establishing an emergency fund is a fundamental financial goal. Aim to set aside three to six months' worth of living expenses in a separate savings account. This safety net will provide you with peace of mind and a buffer against unexpected events, such as medical emergencies, car repairs, or job loss. By having a robust emergency fund, you can face unexpected challenges without derailing your long-term financial plans.

3. Save and invest for retirement
lady saving for retirement

Planning for retirement is an essential financial goal that requires long-term vision and discipline. Determine how much you'll need for a comfortable retirement and set a target savings goal.

Consider contributing to retirement accounts such as a 401(k), IRA, or pension plan. Aim to consistently increase your contributions over time to maximize your investment growth potential and secure a financially stable retirement.

4. Save and invest in college education

If you have children or are planning to pursue higher education yourself, saving for college is a crucial financial goal. Explore options such as 529 plans, education savings accounts, or custodial accounts to earmark funds specifically for education expenses.

By starting early and consistently contributing to these accounts, you can alleviate the burden of student loans and provide yourself or your loved ones with a solid foundation for future success.

5. Start building credit or improve credit score
person balancing credit score

Establishing and maintaining good credit is vital for accessing favorable interest rates on loans, securing rental agreements, or even getting hired for certain jobs. If you're starting from scratch, consider opening a secured credit card or becoming an authorized user on someone else's account to build a positive credit history. If you already have credit, focus on paying bills on time, keeping credit card balances low, and monitoring your credit report for errors.

6. Become a homeowner (Save for a down payment for a home)

Owning a home is a common financial aspiration for many individuals and families. Set a goal to save for a down payment, typically 20% of the home's value, to secure a favorable mortgage and reduce monthly payments.

Assess your budget, cut unnecessary expenses, and explore strategies like automating savings transfers or seeking additional sources of income to accelerate your progress toward homeownership.

7. Finding a higher-paying job (and create multiple streams of income)
a high-income earner

Boosting your income is a powerful financial goal that can significantly impact your financial well-being. Evaluate your current skill set and consider acquiring new skills or certifications that can lead to higher-paying job opportunities.

Additionally, explore ways to generate passive income streams through investments, side businesses, or freelance work. Diversifying your income sources can provide financial stability and accelerate your progress towards achieving other financial goals.

8. Become debt free

Paying off credit card debt, student loan debt, and car loans should be a priority for achieving financial freedom. Create a debt repayment plan by organizing your debts, prioritizing high-interest debts first, and exploring strategies like the debt snowball or debt avalanche methods. Allocate a portion of your budget to accelerate debt payments and consider negotiating lower interest rates or exploring consolidation options to streamline your repayment process.

Turn these into SMART goals

man making financial plans

By incorporating these financial goals into your personal finance journey, you can transform your financial landscape, achieve greater financial security, and unlock a brighter future filled with opportunities and peace of mind.

These are just a few examples. Remember, the key lies in setting specific, measurable, attainable, relevant, and time-bound goals, and staying committed to taking consistent action towards their achievement.

Good examples of financial goals using the SMART goal format

Let's consider examples from three different categories.

1. SMART homeownership goal

Save $12,000 for a down payment on a home over the next 2 years.

Specific: Save a specific amount of $12,000.

Measurable: Track progress by monitoring savings account balance.

Attainable: Create a realistic savings plan and adjust expenses to achieve the target.

Relevant: Owning a home is a long-term financial objective.

Time-Bound: Set a deadline of two years to achieve the goal.

2. SMART debt-free Goal

Pay off $5,000 in credit card debt within the next 12 months.

Specific: Pay off a specific amount of $5,000.

Measurable: Track progress by monitoring credit card balances and payments.

Attainable: Create a budget, reduce unnecessary expenses, and allocate extra funds towards debt repayment.

Relevant: Eliminating credit card debt improves financial health and saves money on interest.

Time-Bound: Set a deadline of 12 months to pay off the debt.

3. SMART retirement goal

Increase monthly retirement contributions by 10% over the next six months.

Specific: Increase retirement contributions by a specific percentage of 10%.

Measurable: Track the increase in monthly contributions on retirement account statements.

Attainable: Adjust the budget to allocate additional funds towards retirement savings.

Relevant: Saving more for retirement ensures financial security in the future.

Time-Bound: Set a deadline of six months to achieve the increased contribution rate.

Remember, using the SMART goal format helps ensure that your financial goals are specific, measurable, attainable, relevant, and time-bound, increasing your chances of success and providing a clear roadmap for achieving your desired financial outcomes.

Smart Moves!

Of course the smartest move is to work with an expert. Connect today !

Bay Street Capital Holdings

Bay Street Capital Holdings

Bay Street Capital Holdings is an esteemed firm situated in Palo Alto. The firm specializes in financial planning, wealth management, and investment advisory services. Their distinctive approach prioritizes the effective management of overall risk and volatility rather than solely chasing maximum returns.

Led by the renowned founder, William Huston, recognized as one of Investopedia's Top 100 Financial Advisors for 2021, Bay Street stands out as one of the two Black-owned firms among the nineteen acknowledged in California.

The company's dedication to promoting diversity and supporting emerging fund managers and entrepreneurs shines through, as evidenced by their selection as a finalist in the Corporate Social Responsibility (CSR) category for the Asset Manager in 2021, competing against more than 900 firms nationwide.






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