Master Your Money: How to Set Financial Goals That Stick

As we step into a new year, there’s no better time to take control of your finances and set clear, actionable goals for the future. Setting financial goals is the foundation for success and therefore I will talk about in my first post, before we begin working on how to achieve them.

I personally would like to pay of my car loans this year (or at least come close to doing so!) AND I would like to save up for a vacation AND I would like to save up for a rainy day AND I would like to be able to work less hours AND I would like to be able to travel and work from anywhere.

But what goal to choose? Do I even have to choose? Can I do it all? I already know that the key to hit my goals is budgeting (which I’m going to cover in depth in later posts), but to keep going with budgeting you have to have a goal to work towards to. Setting financial goals gives your money a purpose. Financial goals provide a roadmap, helping you stay motivated and make better decisions that align with your long-term vision.

Types of Financial Goals

When planning your financial journey, it’s helpful to break your goals into three categories:

• Short-term goals: These are goals you can achieve within a year, like building an emergency fund, paying off a small debt, or saving for a vacation.
• Medium-term goals: These typically take 1-5 years, such as buying a car, starting a side business, or paying off significant debt.
• Long-term goals: These are your big-picture dreams, like saving for a down payment on a house, retiring comfortably, or creating generational wealth.

Set SMART Financial Goals

Money is one of the most powerful tools we have to shape our future, but without a clear plan, it’s easy to feel lost or stuck in the same financial patterns. That’s where SMART goals come in – they turn vague aspirations like “saving more” or “getting out of debt” into actionable, achievable plans.

SMART goals are powerful because they provide clarity, focus, and a path forward. Instead of being overwhelmed by the idea of improving your finances, you’ll know exactly what to do, how to measure your progress, and when you’ve succeeded.

Using the SMART framework, you will make your goals:

1. Specific: Define exactly what yo want to achieve. For example, instead of saying “I want to save money”, say, “I want to save $10,000 for a home renovation”.
2. Measurable: Add numbers so you can track progress, like saving $500 per month.
3. Achievable: Be realistic based on your income and expenses. Stretch yourself, but don’t set goals so high that they feel impossible.
4. Relevant: Align your goals with your priorities. Ask yourself, “Does this goal help me achieve what’s most important to me?”
5. Time-bound: Set a deadline to create urgency, such as “Save $10,000 by December 2025”

Breaking Goals into Actionable Steps

Big goals can feel overwhelming, so break them into smaller, actionable steps. For example:

1. Step 1: Assess your current financial situation by tracking your income and expenses.
2. Step 2: Create a budget that allocates a specific amount toward your goal each month.
3. Step 3: Automate your savings by setting up recurring transfers to a dedicated account.
4. Step 4: Cut unnecessary expenses or find ways to increase your income to boost progress.

These are all steps that I plan to talk about in detail in later posts. They are all crucial to reach your financial goals.

Tracking and Adjusting Your Goals

Staying on track requires regular check-ins. Review your goals monthly or quarterly to see how you’re progressing. If unexpected expenses or changes in income arise, adjust your plan. Flexibility is key to staying committed while navigating life’s ups and downs.

Use tools like budgeting apps, spreadsheets, or even a simple notebook to monitor your progress.

I am a complete Excel nerd so that is my personal go-to tool to use, but I understand it can be complicated for people who are not used to it. There are plenty of apps out there and I will test many of them in the coming months. But you can never go wrong with a pen and a paper to start with. If the perfect app for you doesn’t exists yet, use your notebook – no excuses!

Conclusion

Setting financial goals doesn’t have to be complicated. Start by identifying one short-term goal today. Maybe it’s saving $500 for an emergency fund or paying off small debt. Write down, create a plan and take the first step.

My first goal will be paying off my car loan of $13,000! Alright, that’s probably more of a medium-term loan so I’m giving me the whole year 2025 to pay it off. My first small-term loan will be saving up for a summer vacation. I’ve already managed to save $3,500 for that one (using automate savings!), but I reckon I need about $2,000 more to be completely covered.

In SMART goal terms: I want to pay of my $13,000 car loan by December 31st 2025. That is about $1,000 per month I need to pay extra each month (and after each down payment the capital will decrease and therefore the interests will decrease, so each month the default payment will be a little less). I believe this will be achievable if I budget correctly and stay within budget.

What’s your top financial goal for 2025? Share it in the comments – let’s do this together!