Budgeting Goals
Setting budgeting goals is a key part of a successful financial journey.
Clear, well-defined goals will help you stay motivated and give you a roadmap for your spending and saving.
Short-term goals
Short-term goals are important to include in your budget to ensure you are moving forward financially.
Common short-term goals are smaller debt payoff, and saving for a vacation or wedding.
Start small for short-term goals to build your motivation.
Other short-term goals can include trying to reduce your food budget, cash flowing a home or car maintenance expense, or other financial obligations or desires for the next 6 months to a year.
Long-term goals
Long-term goals are vital to obtaining and maintaining your family’s financial security and success.
Common long-term goals are saving for education, retirement, becoming completely debt-free, savings for a down payment on a house, or any other goals that will take over a year to achieve.
Many long-term goals will take years to decades to achieve. Incorporating the goals into your budget each month will ensure it’s as painless as possible to reach the goal.
Slow and steady is the name of the game for long-term goals.
Tips for Setting and Achieving Financial Goals
Be specific
Clearly define what you would like to achieve and when you want to achieve the goal.
For example, a goal of saving $500 for car maintenance by three months from now is more actionable than saving for future car maintenance
Make your Goals SMART
Ensure the goals are Specific, Measurable, Achievable, Relevant, and Time-bound.
Specific: How much, for what purpose, and by when.
Measurable: Saving a set amount, not just saving; paying off a particular aCelmount of debt, not just paying off debt.
Achievable: Likely it’s not achievable to save $2,500 for vacation by the end of the month. Be realistic with your goal. While $2,500 by the end of the month may not be achievable, maybe saving $2,500 by the end of the year is achievable.
Relevant: If you owe hundreds in debt, it may not be relevant to prioritize a goal of saving 15% for retirement.
Time-Bound: Set a deadline for the goal! It’s not very motivating to simply say pay off your store credit card. If you give a goal of paying it off within the next 6 months, it’s much more motivating and manageable.
Monitor your progress
Ensure you are regularly reviewing your progress toward your goal and adjust your budget and strategies as necessary.
There are many apps and trackers that you can use to monitor your progress. Frequent monitoring will help instill motivation or adjust your goal amount or timeline.
Celebrate Milestones
Hand-in-hand with monitoring your progress is to celebrate milestones. Many apps or trackers have built-in milestones.
Milestones can include debt payoffs or savings in particular increments of $50, $100, $200, etc. Or paying off an entire debt. Or completing a savings goals
Celebrations can be as simply as getting pizza, taking a day-off work, it simply creating a DIY photoshoot to commemorate achieving the milestone.
Next steps
Setting and achieving budgeting goals is a dynamic progress. Regular review and adjustment will help you stay on track and adapt to changes in your financial situation.
Future posts will go into more depth for specific financial goals, such as: Emergency Funds, Debt Repayment, Retirement Savings, Large Purchases, Education Savings, Investing for Growth, Regular Savings, Monthly Budget Adherence, Charitable Giving, and Financial Independence.