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5 simple steps to set your money goals

Setting out your own goals is an essential step towards improving your financial health

29 August 2023Timothy Woods 7 min read
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If you’re not sure how to go about setting financial goals, you’re in the right place. We take a look at five simple personal finance goal-setting tips you can implement today, as well as some proven money management hacks.

Some of the most common financial goals include paying off credit card or overdraft debt, improving your credit score, saving up for a deposit on a home or building an emergency fund for unexpected expenses.

These are just some examples of popular targets to aim for. You might have different ones or objectives that are very specific to you. It’s important to think exactly about what you want to do money-wise. From there, you can define exactly what your goals will be.

In the beginning, you might want to keep it as simple as possible with one or two objectives. Later on, you can include more and also think about what you want to achieve over the short, medium and long term. Or maybe you want to dive straight in with a detailed goal-setting plan from the off. It’s entirely up to you!

The following five steps are time-tested tactics that will help you to make your financial goals a reality.

1. Make your goals specific

A general goal like “start saving” is not ideal because it doesn’t include a specific target to hit and it makes tracking your progress more difficult. Defining a specific goal makes it motivational as you have something precise to work towards and you can more easily track your weekly or monthly progress. For instance, if you do want to save more money, “Start saving” could become “Put £30 per week into a savings account.” Of course, if this is the kind of goal you want to set, the monetary amount depends on your financial means and how much you want to devote to saving, which brings us to step two.

2. Make them achievable

When goal-setting, it’s so important to get the balance right between being motivational and unrealistic. Very often, when we want to achieve something and are adamant that we can do it, we set goals that are too lofty. It’s the main reason why New Year’s resolutions get broken more often than not.

With this in mind, it’s absolutely critical to make your goals motivational without being too hard to achieve. Here, it’s a good rule of thumb to remember that financial goals are usually a long-term commitment. If it involves a lot of sacrifice, it is usually doable for a short period, like a week or two, but when it becomes a period of months or even years, it’s probably not realistic. On the flip side to this though, you don’t want to set the bar too low either. Getting the mix right so your goals are achievable, realistic and motivational is key to your success.

3. Make them personal to you

While a friend's goals might include saving up for a deposit on a home or becoming debt-free, your goals might be different. And it’s important to embrace them. Your financial objectives may not be the same as someone else’s and that’s a good thing. Each person’s financial situation is different and unique to them.

So it makes sense to make your goals personal to your own circumstances and what you want your own financial situation to look like. For instance, you might want to pay for some home improvements, get that dental work you’ve been wanting to do for a while, or pay for lessons in a new hobby. Whatever they may be, your money goals are yours and yours alone.

4. Make deadlines

A date in the future to reach your target gives you something to aim for. A deadline also acts as motivation, as we know that there is an end in sight. Without them, it’s easy to get relaxed about achieving objectives, because it’s so easy to put the effort required off until another day.

Like step two, your deadlines should be realistic and motivational. Finding the right balance is the key to ensuring that reaching your goal isn’t too difficult.

5. Track your progress

Measuring your efforts is a crucial step. It’s a good idea to track your progress on a weekly or monthly basis. This helps you to see exactly how you’re doing and if you’re on course to hit your goal. It also helps you to see what is preventing you from doing so or where you can improve things further.

You can keep an eye on your progress by regularly making time to sit down and look at how you’re doing. For instance, if you want to pay £50 off debt per week, you can choose the same time each week to carry out the transaction. If you forget some weeks or are not able to make the payment, you can take action. For instance, you could set a calendar reminder in your phone to make the £50 payment or even ask your bank to automate it, so you aren’t at risk of forgetting again. If you weren’t able to make the payment some weeks, a periodic check of your bank statements can help you see where you can cut back on certain expenses.

A lot of the time, setting new money goals can be daunting. You might have some goals in mind but aren’t sure how to take measures to shore up your finances and get on the road towards financial prosperity. This is completely normal. These tips cover some of the things you can do to achieve your money goals.

Set budgets

Budgeting is something that most people know is a good idea but simply don’t do. Some of the common reasons people avoid budgeting is a feeling of limitation, not sticking to past budgets or not knowing how to create one.

You can set a budget easily by, first of all, taking away your mortgage or rent, council tax bill and monthly utility bills from your income. You should also remove other essential costs like travel, your phone bill and any other monthly outgoings, like a gym membership. You then have your disposable income left. This is the set amount that you are free to divide between groceries, clothes, social events, buys for your home or your hobbies.

You can divide your disposable income into weekly or even daily amounts with your financial goals front of mind. By adhering to this budget, you make achieving your financial goals so much more possible. You can also split an overall budget into mini budgets. For instance, you might give yourself a certain amount to spend on your daily lunch or a small treat like a morning coffee.

Set monthly/weekly savings aside. 

If you decide how much you will save and the timeline you are working towards, then congratulations, you now know how to set savings goals.

Now you can commit to that saving goal by setting money aside each week/month. If you are worried you may too easily use that money for other purposes, find a way to set aside the money into a separate, dedicated account.

Make sure you review your savings goal and savings strategy on a regular basis to make sure you’re sticking to it and adjust your behaviour accordingly.

Hold yourself accountable by tracking your saving progress each month against your savings goals.

Determine where the money will come from.

Use a personal finance app to look at your current spending and understand where you could cut down. Calculate how much money you think you can set aside.

You also want to address the question of how much money should I save? To answer this, do some simple math to see if the total value of money you think you can save equals what you need by your deadline in step 2.

For example, if you have a goal of £10,000 savings in two years, you need to save £416 each month (£10,000 / 24 months), or £96 per week (£10,000 / 104 weeks). If you think you are able to save more, you can move up your timeline. But if you can’t, you may need to find new ways to save or move your deadline back.

Track your spending

Keeping a close watch on your spending enables you to see exactly where your money is going. It can often be surprising just how much you can spend on certain things. Your bank statement is an excellent way to keep track, but these days, many banking apps can make the picture even clearer by showing how much you spend on different categories like food, restaurants, and entertainment.

It’s a good rule of thumb to check in on your spending regularly, either daily or once a week. Make time to focus on it. The more committed you are to this process, the more rewards you will reap as a result.

Check if you can save money on bills

You might be surprised to know that many service providers can and do renegotiate rates that they have with customers. This is especially the case if you are prepared to leave and go elsewhere. This can include energy providers, mobile phone networks and club memberships. You could also try renegotiating your rent price or a freeze on rent increases.

Another option for many regular expenses is to simply go elsewhere. For instance, you might be able to choose cheaper internet and mobile phone contract service providers, without compromising on quality. You could also buy groceries at a less expensive supermarket.

Talk openly about money at home

Reaching a target is harder if everyone involved isn’t pulling in the same direction. If your goals depend on your family’s input too, it will be easier if they are also on board. Having frank discussions about money is usually not a conversation we look forward to, but it is so important. Asking your partner and any other family members who should be involved in such a conversation to sit down to discuss your financial goals can help them to see what you want to achieve. The moral support from those around you is in itself a fantastic boost.

Improve your credit score

You can increase your credit score over time by showing that you can manage credit responsibly. This means making your credit repayments on time. The act of doing this will slowly but surely improve your creditworthiness. The flip side is that missing such payments can damage your credit score, so it’s really important to make sure you make your payments on time consistently. You can check your credit score for free by logging into your ClearScore account.

These financial goal steps and everyday money management tips should dispel some of the most common doubts. By following them, you will put yourself in a fantastic position to improve your overall personal financial health and achieve your money goals.

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Written by Timothy Woods


Tim has worked in finance for over ten years, with a particular focus on personal finance education and investment. Originally from Ireland, he studied in Manchester and now lives and works in Barcelona, Spain.