Setting important financial goals isn’t just about numbers; it’s an in-depth look at your own needs and wants that helps you match your financial resources with your goals.
In this blog post, we’ll guide you through practical financial goal exercises, thought-provoking questions, and engaging activities to help you craft financial goals that resonate with your unique journey.
Why you should set financial goals
Setting financial goals is an empowering and proactive approach to managing one’s financial life. It provides direction, purpose, and a framework for informed decision-making, ultimately contributing to a more secure and prosperous financial future.
18 Smart financial goal exercises
Doing financial goal exercises can help you to focus on building and achieving your financial goals.
They can also give you the tools to evaluate, refine, and realign them.
Here are a couple of exercises you can try to get you started and keep you on track to achieving your financial goals.
1. Reflect on your values.
First, think about what you stand for.
- What’s important to you in life?
- What do you want: family, personal growth, excitement, safety?
Figuring out what you stand for will help you set financial goals that are in line with your dreams.
2. Visualize your ideal lifestyle.
Close your eyes and visualize your ideal lifestyle.
Think about:
- where you live
- what you do every day
- and the things that make you happy
This activity can help you discover goals that may not be obvious at first.
3. Write down your financial dreams.
Get a notebook and write down everything that comes to mind when you think about your future.
Write down everything you want and need, no matter how big or small.
- Do you want a large house?
- Where do you want to live?
- Do you want to travel?
- Do you want a family?
- What kind of lifestyle do you want to have?
Writing down your dreams makes them more tangible and concrete in your mind. Plus, you can always go back to what you have written down and evaluate your progress in achieving them.
4. Know your motivation.
When you set financial goals, you should think about “why.”
What will being good with money help you do in the future?
Every long-term goal is different, but usually, everyone wants to save money and make more. For example, someone who loves to travel might want to make sure they have enough money when they retire. Not only to pay for their basic needs – but also go on many trips.
If you want to reach your financial goals, you need to know why you want to do it.
5. Assess your financial situation.
Before setting goals, you should take a look at your present financial situation.
Get a handle on your:
- income
- spending
- bills
- and savings
This picture will help you make goals that are reasonable and doable.
6. Set SMART goals.
SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound.
Apply these principles to each goal. Instead of a vague “save money,” make it specific, like, “save $500 in six months for an emergency fund.”
SMART Financial Goals: What They Are & 5 Ways You Can Get Started→
7. Break down goals.
It can be hard to reach big goals.
Split them up into smaller steps that you can handle.
If your goal is to buy a house, for example, break it down into three steps:
- saving for a down payment
- improving your credit
- and looking into your mortgage choices
8. Categorize your financial goals.
Categorize your goals according to a timeline. Short-term goals position you to complete mid-term goals, which position you to accomplish long-term goals.
9. Prioritize your goals.
Now that you have a list, you need to decide what to do first.
Which goals need to be done right away and which ones can wait?
Setting priorities will help you spend your money on the things that are most important to you right now.
10. Create a vision board.
Turn your goals into a visual masterpiece.
Collect images, quotes, and symbols that represent your financial aspirations. A vision board serves as a constant reminder and motivator.
A Financial Vision Board Will Help You Reach Your Goals – How to Get Started→
11. Review goals regularly.
Your goals change as your life does. Always make the time to go over your goals.
Has anything changed in your life or with your money?
Change your goals to stay in line with your changing hopes and dreams.
12. Go through a “No-Spend” week or month.
It’s helpful to try this as a “pattern interrupt.” If your daily spending doesn’t bother you, try not spending any money at all.
Try it for one day. Or a week. Check to see how many days you can go without spending.
If you want to push yourself, try not spending any money on anything other than necessities or set costs (like groceries, bills, and your mortgage or rent). Do this for one whole month.
Want to Save Money With a Spending Freeze Challenge? Get Started Now!→
13. Have cash-only days.
Just like no-spend days, having at least one cash-only day a week is a good idea. Try to spend the set amount of cash you’re allowed to spend each day. If you spend $40 a day on different things, challenge yourself once a week to only spend $20.
14. Delink your credit and debit cards from online merchants.
It may be a little painful, but it will be worth it!
Your cards are already linked to your favorite online stores, which saves you time. But think about how much money you could save if you had to stop what you’re doing and look for your wallet.
15. Cut services and subscriptions.
Look over all of your subscriptions and decide if you still need them. It’s always a good idea to clean out your subscription accounts.
16. Build emergency funds.
If you start saving for an emergency fund this year, you can focus on paying off all of your debts, like loans and credit cards, in the next five years.
This will free up money and improve your credit score, which will help you reach a financial goal, like buying a house in ten years.
17. Read a personal finance book.
You can improve your financial knowledge and health by reading a personal finance book.
This gives you the information and tools you need to:
- understand personal finance
- make smart choices
- and work toward a more safe financial future
Personal finance is a dynamic field with evolving strategies and market conditions. Reading personal finance books allows you to engage in lifelong learning and stay updated on new trends, technologies, and financial opportunities.
2024 Goals: 9 Personal Finance Books To Boost Your Wealth→
18. Celebrate your achievements.
Celebrate your wins, whether big or small. Acknowledging your achievements keeps you motivated and reinforces positive financial habits.
Financial goal exercises: Final thoughts
Setting financial goals is a powerful way to learn more about yourself. By doing these useful activities, you are not only making your financial future safer, but you are also lining up your resources with your inner goals.
Don’t forget that your financial goals are unique, and this process is all about making a plan for the life you want. Good luck setting goals!