[wpseo_breadcrumb]Stop what you’re doing and think about what you are working toward right now. What kind of aspirations do you have for your life? When you’re making life plans, it can be hard to connect your ambitions back to your finances. Enter: Setting financial goals.Why set up financial goals?Creating financial goals can be the difference between your hopes and dreams… and your reality.Just like setting life or business goals, setting financial goals is the key to realizing their success. When you set realistic, achievable financial goals, you are laying down the foundation to making those goals happen, the way you want them to happen.Financial goals definitionYour financial goals are going to be unique to you, but they will all have a few key elements.Every financial goal will have a start date, an estimated end date, an estimated amount (if you’re saving or investing), and a reason behind why you’re setting that financial goal. Successful goals will also have a clear plan of attack: What you are going to do in your daily life to reach them.How long do financial goals take?Financial goals can be as short as 1-2 months or longer than 30 years. The length of your financial goals will depend on what you want to achieve and a realistic idea of how long it’s going to take you to achieve it.Common short-term financial goals include:Saving money for a few months for a short vacationCreating a budgetStarting an investment accountLong-term financial goals can include:Paying off student and auto loan debtSaving for an emergency fundPlanning for retirementEveryone should have a mix of shorter and longer-term goals, but it ultimately depends on what stage of life you’re in and what you want to achieve.Examples of financial goalsYour financial goals will look different than your neighbors and your coworkers. But there are a few common types of financial goals that you will likely set at some point in your life.Before you set financial goals of your own, here are four of the major types of financial goals to set:Saving – Saving is one of the most common financial goals, but one of the hardest to commit to. You could set the goal to save for an emergency fund, a vacation, for a large down payment, a college fund or your retirement. When starting a savings plan, consider following the 50/30/20 rule, which sets aside 20% of your monthly income toward your savings.Investing – Investing is the most popular way to make money work for you. Setting investment goals means that while you won’t see the money you put in now, you’ll make a return on investment later in life. How you invest will depend on your risk tolerance, but many people opt to invest in low-risk options like corporate bonds, treasurys (which include treasury bonds) or bank CDs.Readjusting finances for a lifestyle change – Major life events happen, and a common financial goal is to simply prepare for those major life events. Lifestyle changes that can require some time to readjust include: Switching jobs, starting a business, preparing for a new child, and retiring. Each of these life events has a period of transition when you’re figuring out how to make it work. You may have to rework your budget, move money to different accounts, or change the way you manage your money.Paying off debt – When you set the financial goal to pay off debt, you’re making plans to pay off every debt you have. Things like student loans, auto loans, credit card debt, and yes, your mortgage too, all can be paid off when you systemically plan to make it happen. How to set financial goals of your ownNow that you know what others have set as their financial goals, it’s time to start laying down the groundwork for yourself. There are 3 components to setting up financial goals. You’ll need to understand:What your financial situation looks like todayWhat you want your financial situation to look likeHow you are going to get thereStep 1: Understand what your finances look like nowBefore you set your goals, it’s important to understand where you are. Get a pen and paper or open a spreadsheet and begin listing out all of your assets and your liabilities. Your assets will include anything you own and any savings or investments you have. Your liabilities will include anything you owe money on, such as a mortgage or student loans.Then, evaluate your budget. How much money is coming in, versus how much is going out? Are you meeting your current budget limits and savings goals?By the way, no one really feels good about themselves after they’ve looked at their budget. We promise: understanding your financial situation will be the most painful part of the process of setting financial goals.Step 2: Figure out what you want your financial situation to look likeThis is the part where you get to dream a little. The second step in setting financial goals is to figure out what you want your goals to be. What do you want to have or be able to do over time?Take the time to write down what you want to achieve. Talk to your partner and family. Ask the people in your life who are doing the things you want to do. This is the time to get inspired and excited about what the future holds for you.Ask yourself questions like:What kind of lifestyle do I want to have when I retire, and how much will it cost a year?Do I want to purchase a home with my partner or stay renting?At a minimum, how much money will I need to start my business?When I vacation to Italy, will I want to keep it inexpensive or will I want something more lavish?If I lose my job tomorrow, how much money will I need in order to stay afloat for 3 months?Step 3: Determine how you are going to make your financial goals your realityBack down to Earth. The final step in setting financial goals is figuring out how you’re going to get there. First, prioritize what you really want to accomplish. You should be working toward several financial goals at once, but make sure what is most important to you is at the top of your list.Then, pick your top priorities and lay out what you need to do to achieve them. Once you know how you’re going to do it, make the plan to adjust your current finances to fit.You’ll likely have to wrestle and re-prioritize in this step. It’s important to stay realistic, but do not get discouraged. If something is truly important, you will find a way to make it work.Financial planners can assist you in making your financial goals concrete and achievable. They can be especially helpful for complex or long-term financial goals like managing a business and saving for retirement—but they are not required.Stay on track to watch your goals come to lifeOnce you set your financial goals, and have a clear idea of how you’re going to achieve them, you’re on your way!Here are a few tips that can help you be successful in reaching your financial goals:Automate + simplify – Figure out ways to simplify even the smallest tasks. Ask your employer if they have savings or investment options that can pull directly out of your paycheck. Add formulas to your financial spreadsheets. Try services and smartphone apps that automatically take money out of your account and put them into savings accounts.Tell others about your goals – Having people interested in your progress can help you stay motivated to make that progress. Consider telling members of your family, trusted coworkers or your social media followers. The people in your life want to see you succeed, and they will want to know how you’re doing.Continue to create short-term financial goals for yourself – Small milestones make a big impact. Achieving short-term goals allows you to see the rewards of your work in your day-to-day life. You may want to always be saving for a weekend getaway or gifts for loved ones. For long-term goals like saving for retirement, set savings goals for every year.Remember that you set these goals. You can change them too – While we don’t recommend changing or readjusting your goals often, it’s important to remember that it’s okay when plans change. Emergencies happen and priorities change, but you have the ability to adapt. When something derails your financial goals, take the time to adjust. Then, put your foot back on the gas and move forward.Ready? Set… Go. Setting up financial goals requires some work upfront, but actually achieving your goals will be worth it. When you set your financial goals in motion, you’re setting yourself up to achieve success in those goals, and in truly living the life you want. Now, go make it happen.