How To Set and Achieve Financial Goals

Looking ahead to the future often brings big dreams, a home to call your own, the freedom to travel, or a comfortable retirement. Exciting dreams like this don't just happen. They require discipline and planning. Start with these practical tips for setting meaningful goals and making progress toward them. 

Use the SMART Framework To Shape Your Goals

When building a plan, it may help to turn your ideas into clear, focused goals. Using the SMART framework may help to ensure your goals are specific, measurable, attainable, relevant, and time-bound.^[1]

Specific – Be clear about what you want to accomplish.

Instead of: “I want to save money.” Try: “I want to save $1,000 for a study abroad trip.”

Measurable – Define how you’ll track your progress.

Example: “I’ll save $100 per month for the next 10 months”

Attainable – Make sure your goal is realistic for your current financial situation.

Example: “I’ll cut back on takeout and shift that money to savings.”

Relevant – Choose goals that matter to you and align with your values or bigger plans.

Example: “This trip ties into my major and helps with future career opportunities.”

Time-bound – Set a deadline to stay focused and motivated.

Example: “I’ll have the full amount saved by May 1st.”

This system helps keep your goals grounded in reality and makes it easier to track progress. 

Understand the Different Types of Financial Goals

Dividing goals by timeline helps you stay focused, realistic, and motivated. Financial goals typically fall into one of three categories:

• Short-Term Goals (under 1 year): For example, paying off a credit card, buying books for next semester, or saving for a spring break trip.
• Mid-Term Goals (1-5 years): Any include saving for a car, building an emergency fund.
• Long-Term Goals (5+ years): Big-picture goals such as buying a house or investing for retirement.

Once you've categorized each goal, the final step is to rank them in order of priority. Knowing which goals are most important to you may help when allocating limited resources, managing competing timelines, or making tough financial decisions.

Assess Your Financial Situation

Now take a look at your budget. If you don’t have a formal budget, it’s a good time to create one. List out your monthly financial obligations — rent, utilities, groceries, technology, transportation, entertainment, insurance, a monthly savings contribution, etc. — and then subtract those from your monthly income to see how much is left for your newly defined goals.

Don’t be discouraged if there’s not a lot of cash to spare! You may need to adjust your expectations about how long it may take to achieve a certain goal, but remember that your circumstances can change, and starting small is how many big dreams come to fruition.

This objective assessment may also cause you to reprioritize your goals. For example, if you see that you have a lot of credit card debt, you may want to prioritize paying that off before you start saving for a vacation. Waiting until next year to take the vacation you had planned for this spring might be disappointing at the moment, but you may find it’s worth it if it means being debt-free by the time you go. Reprioritize your goals as needed from this perspective of being fully aware of your financial circumstances.

Set Specific Financial Targets

Vague targets are difficult to hit; be as specific as possible with yourself in planning how you intend to reach each goal. Asking yourself questions may help: What is the monetary value attached to each goal — that is, how much do you need to save? What is your target date for reaching each goal? How much will you need to put toward that goal each month? Remember that, for longer-term goals, you can start with a small amount and build your contribution from year to year as your income grows.

Keep Track of Your Progress

Being able to see exactly how far you’ve come (and how close you are to your goal) can be a fantastic motivator to keep you moving in the right direction, as well as point out any areas where you may need to make adjustments to your plan. There are plenty of apps available to help you visualize your progress, or you can keep a journal.

Plan for Common Challenges

Even the best financial plans sometimes hit a bump in the road. Expect that everything won’t go perfectly, and have a plan in place to get back on track when something disrupts your progress. Some common setbacks include: 

• Unexpected expenses: Even a small emergency fund may help you avoid falling behind.
• Loss of motivation: Break large goals into smaller milestones and track progress visually.
• Inconsistent savings: Automate contributions, even if the amount is small.
• Getting distracted by others’ progress: Focus on your personal goals and realistic timelines and avoid comparison. 

Instead of aiming for perfection, prepare yourself so a small detour doesn't throw you too far off track. 

Talk About Your Goals

Peer pressure isn’t always a bad thing: Sharing your financial goals with like-minded family members and trusted friends may help you hold yourself accountable and stay on track toward achieving them. You also may find it helpful to discuss your goals with a financial advisor. They may have insights or tools to help you manage your money more efficiently and potentially reach your goals more quickly.

Keep a Positive Outlook

If you become discouraged along the way because things aren’t going exactly as you had planned — maybe a financial emergency took you off track for a while or you made a misstep in keeping with your plan — remember that we all experience setbacks at one time or another. Just stay focused and keep in mind that any progress is good progress. Your goals are in sight!

Need help creating a budget? The PNC My Finance Academy Student Budget calculator is made specifically for college students to make budgeting easier and maybe even fun!