family budgeting

The Easiest Way to Set and Achieve Your Financial Goals

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One crucial strategy for managing your finances is setting and working towards financial goals. Financial goals give you a sense of purpose and control over your finances as well as financial security.

Over the years, I’ve set many financial goals. Sometimes, when money has been super tight, progress towards our goals has been slow. It once took me a year to save for a good quality fry pan because I could only save one dollar each payday. 

(Hubby dropped the brand new frying pan and snapped the handle off, and we used it broken for years, but that’s a story for another time. On the upside, it was instantly rendered oven-safe.)

But even slow progress is better than no progress. And each new goal has taught me better goal-setting strategies.

Below are ten strategies that I’ve found help achieve financial goals and some tips for speeding up plans and what to do when life throws you a curveball and prevents your progress.

Book with wish for it, hope for it, dream of it, but by all means do it, written in it.
[S O C I A L . C U T]/

But First, What are Financial Goals?

There are two types of financial goals: direct financial goals and indirect ones.

Direct financial goals relate specifically to improving your financial circumstances. Some examples of financial goals include:

  • pay off debt
  • build an emergency fund
  • build and investment portfolio
  • invest in your education
  • save for children’s education
  • save for retirement
  • create and stick to a budget

Indirect financial goals are goals that you need to save money to achieve. For example, an overseas holiday doesn’t improve your financial circumstances, but you need money to do it. Because it impacts your finances, it’s an indirect financial goal. 

Indirect goals are easier to achieve because they have an inbuilt reward. Travelling overseas is far more exciting than having an emergency fund and requires less motivation to cross the finish line.

While you can use the following ten steps for any type of goal, they are particularly useful for direct financial goals that aren’t as ‘fun’ to achieve. 

10 Step Plan for Setting Achievable Financial Goals and Making Them Happen

Follow these steps to create and achieve your financial goals to improve your rate of success.

1. Make SMART financial goals 

To make financial goals achievable, they need to be SMART.

SMART goals should ideally be Specific, Measurable (easy to track), Achievable (realistic given your circumstances), Relevant (something important to you), and Time-bound (have a specific end date).

Indirect financial goals like saving for a holiday fit easily within this framework. You have a strong motivation (holidays are fun), a concrete target (flying somewhere is both specific and attainable), it’s measurable (you can research how much it will cost and save that amount), and you can set a date to go (making it time-specific).

Vague goals like ‘build an emergency fund’ or ‘save for retirement’ need to be made SMART by determining a specific amount within a particular timeframe that is achievable given your current circumstances. 

2. Create a powerful WHY for achieving your goals

Making goals SMART doesn’t automatically make them achievable. You also need a compelling reason to stick to your goal when you don’t feel motivated.

Having a greater sense of purpose behind your goals means you’re more likely to see them through. 

Each of us has different values – identify your values and use them to give meaning to your goals.

If you value ‘family’, your sense of purpose may come from building an easier financial future for your children. If you value security, then building financial security will be your primary driver. If you value freedom, then not being in debt to others may be your why.

Understanding your why and couching your goals in terms of your values will give you a compelling reason to keep going when motivation lags.

3. Research your financial goals to reverse engineer the result

Now that you’ve set SMART goals and identified your primary motivations, the next step is to create an action plan for achieving them. 

The first stage is researching how much you will need to reach your goals. 

That might mean researching online or consulting a qualified expert for advice. 

If your goal is to travel, a travel agent can help you work out a budget. If your goal is to save for retirement, a financial advisor will advise you how much you will need in retirement.

Once you’ve researched a goal amount (made your goal specific), the next step is to give it a due date (make it time-bound). That might mean deciding to travel in six months or planning to retire at 68. 

Then divide your goal amount by the amount of time you have to calculate how much you need to save each payday to reach your goal.

For example, just say your goal is to save three months worth of expenses as an emergency fund. You’ve looked over your recent costs (research) and calculated you need $3,000 (specific goal). If you give yourself one year to save (make it time-bound), you can calculate that you need to save $58 each week to reach your goal.

4. Create a realistic budget to reach your financial goals

A budget is a vital tool that helps you reach your financial goals.

If we think of achieving goals as a journey, then the financial goal is the destination, making your goal SMART and reverse engineering is the map that guides you, and your budget is the boat that gets you across the finish line. It provides the structure in which to save.

Can you realistically afford to reach your goal within the timeframe that you’ve set yourself? A budget will help you answer that. 

Are there places you can cut back to achieve your financial goals? Again, a budget can help you pinpoint your areas of spending that can be adjusted. 

There are many resources on this website for creating a budget, but building a basic budget is the best place to start. This guide will help you work out your income and expenses but more importantly, it turns traditional budgeting on its head to make it easier to reach your financial goals.

5. Adjust Your Budget to Meet Your Goals

What if, after you’ve done up a budget, you find you can’t save enough in the time you’ve given yourself to reach your goals?

I’ve been there plenty of times when my goals are grander than my budget allows. In this circumstance, you have three choices (or a combo):

  • Trim expenses from your budget to reach your goals
  • Earn more income (a side hustle, maybe?)
  • Adjust your goal (either reduce the amount you want to spend or increase the timeframe)

If you have many discretionary expenses, then trimming your budget short term is the easiest way to save more money towards your goals.

To trim your budget, have a look at each expense, particularly discretionary expenses, and see which ones you can reduce or eliminate until you reach your financial goal. 

Can you cut streaming services for a few months? Or take your coffee instead of buying it? The key to saving success is to replace your current spending habits with alternatives, so you don’t feel deprived. 

If your budget is already super tight, then you’re not going to have any more expenses to trim. The alternative is to earn more money. This could take the form of a side hustle, moonlighting in a second job or selling unwanted clutter. 

If neither trimming expenses nor earning more income is feasible for you at this time, the final option is to adjust your goals to suit your circumstances better. 

This might mean increasing the timeframe. So if your goal is to save an emergency fund in twelve months, you might change it to a twenty-four-month timeframe. That way, you’re not giving up on your goal, just massaging it to make it more realistic.

6. Pay yourself first to guarantee success

The problem with traditional budgets is they encourage you to save money after all the expenses are paid if you have anything left over. 

Turn traditional budgeting on its head by paying money towards your goals FIRST and then live off what you have left. This almost guarantees you will reach your financial goals (assuming you don’t dip into your savings).

If you’ve reverse engineered your goal as per step 1 and 2, and you’ve created a budget to make sure your goal is realistic, then you can rest assured that there will be enough for day to day expenses.

I’ve been using this system for years, so I want to assure you, it IS possible to pay yourself first, even when money is super tight. As I mentioned above, there were times when all I could afford to put aside was $1 each payday. But that tiny amount helped us feel in CONTROL of our finances. 

No one will get rich saving $1 a fortnight, but reinforcing the habit of saving is priceless.

7. Automate your savings to guarantee they happen

We humans aren’t as rational as we like to think. We can talk ourselves out of saving money (“I’ll do it next week”) or forget. 

It’s easier if we don’t fight our natural inclinations but set up systems that don’t rely on discipline. When it comes to saving money, the best system to automate your savings. 

Internet banking is your friend here – you can set up an automatic transfer to come out of your transaction account on payday and go straight into your savings account. 

No need to remember. No need to be disciplined. 

And extra points if it goes into a high-interest (lol, I know) savings account that isn’t easy to access. That way, you don’t have to fight the temptation to dip into your savings. 

Commitment and discipline are all very well and good, but automation is better. 

8. Track your progress towards your goals 

According to Tony Robbins, progress is the ultimate motivation. Seeing your progress reinforces the idea that you’re CAPABLE of reaching your goal (you’ve made it this far), and it encourages you to stay consistent. 

It also means you can use a psychological hack that James Clear refers to as the ‘Seinfeld Strategy’ to keep you on track with your goals. Seinfeld was talking about becoming a better comedian, but you can use the same strategy to work towards any goal you like. 

The Seinfeld strategy involves tracking your progress each day on a calendar; do the work (practice/save money), mark it on the calendar. The focus isn’t the result; the focus is the daily practice.

“After a few days, you’ll have a chain. Just keep at it, and the chain will grow longer every day. You’ll like seeing that chain, especially when you get a few weeks under your belt. Your only job is to not break the chain.” Brad Isaac on Jerry Seinfeld’s advice for success [source]

Tracking your progress towards your financial goals involves creating a ‘chain’ of savings (or repayments). Instead of focusing on the end goal (which may be months or years away), you’re focusing on just the next step.

There are lots of ways to track your progress. 

If you’re geeky like me, you can create a savings plan or amortisation table in Excel and mark on it each time you deposit towards your goal.

Alternatively, you might like to create a beautiful spread in a bullet journal, if that’s your thing. My friend tracks her savings goals on an Insta-worth hand-drawn thermometer in her bullet journal. 

Or you can just tick a checkbox on a scrap piece of paper or in a journal, which isn’t as pretty but works just as well without the extra work. 

Whatever method you use, the thing to remember is: don’t break the chain. 

9. Give yourself an allowance to stay the course

Some financial goals can take a long time: months, sometimes years. 

So it’s crucial to get the balance right between saving for tomorrow and living for today – not just to keep you motivated over the long term, but because we never know what the future brings. 

One way to find balance is to give yourself a guilt-free allowance. An (adult) allowance gives you some control, freedom and flexibility in your spending and takes some of the restrictiveness out of budgeting. An allowance also allows you to ‘live’ now while still working towards your goals.

My husband and I both have an allowance. I have no idea what he spends his on, which is precisely the point! 

(He doesn’t know what I spend on either, although it’s no secret: coffee and books, people, coffee and books.)

You both have guilt-free freedom to spend how you like within the larger framework of being responsible to each other. 

How much allowance should you give yourself?

Depending on your goals, circumstances and spending habits, anything from $5 – $100 each a week (less for kids) can give you a sense of freedom and control. Even if money is super tight, $5 a week for a coffee out with friends (or whatever you like) is essential for your independence and happiness.

After doing a budget and paying yourself (or your goals) first, your allowance comes out of your discretionary money. If you have a partner, it’s a good idea to discuss it together and agree on an amount for both of you. 

It’s also a good idea to automatically transfer that amount to a separate account (or withdraw in cash), so it’s super easy to keep track of your allowance and not overspend.

10. Gamify your goals and reward your progress for the win

Our brains are wired for immediate rewards, not long term contingencies. Evolution has taught us to make the most of today because tomorrow might bring famine or worse. 

Logically, we know we ‘should’ save money for something desirable in the future, but it’s hard not to give in to temptation when we’re presented with something else desirable right now. 

Don’t fight your desire for short-term gratification; exploit it by gamifying your goals. Gamification means turning something into a game by making. 

The game strategies we want to apply to our goals are:

  • they are winnable
  • they use novel challenges to keep us playing
  • they have mini-goals throughout the game (levelling up); and
  • there are feedback loops (rewards and punishments) that give us little rushes of dopamine. 

If you’ve created a SMART Goal and checked your budget to make sure it’s realistic (steps 1 to 4), then you’ve made your goal winnable.

If you’ve followed step 8 and created a way to track your progress, you can set milestones (mini-goals).

Each time you reach a milestone (‘level up’), reward yourself (feedback) for the dopamine rush that keeps you motivated. 

Let’s talk rewards. Mini-rewards are a great way to stay motivated, but they are even more critical for distant and dull goals like saving for retirement. 

For rewards to work, you need some rules:

  • You can’t cheat and reward yourself when you haven’t reached a milestone
  • Don’t make the rewards expensive so that they set you back on your goal. Small, consistent rewards are better than big ones.
  • To take your gamification to the next level, make each level a little harder to achieve and get someone else to decide when you get your rewards. Intermittent and unpredictable rewards are more motivating than regular ones. 

When it comes to novel challenges, you can set yourself extra challenges to reach each milestone. 

For example, you might try to reach the next milestone within a specific time frame that’s less than a regular pay period. Or you might make the next ‘level’/milestone a ‘double-up’ where you aim to double your savings in the pay period. 

Money Hacks that Help You Reach Your Financial Goals Sooner

Here are some ideas to gain some quick wins, ‘level up’ faster and achieve your goals sooner: 

  • Sell some things you no longer need
  • Have a no-spend challenge and put your savings towards your goal
  • Cut your budget to the bare bones for a month or two. Cut all discretionary expenses like subscriptions and eating out, and work on reducing utilities to give your savings a boost.
  • Have a pantry challenge to clear out the pantry and put your savings towards your goal
  • Every time you don’t spend on impulse put the money you would have spent towards your financial goal.
  • Refinance loans (run the numbers with an expert to see if this is a good idea for you).
  • Start a side hustle. It doesn’t have to be complicated. I started an ironing business by putting a single ad in the paper. Maybe you can offer services to friends or family for a small fee – everyone needs chores done!
  • Downsize your stuff. For example, switch a gas-guzzling car for a smaller, cheaper model.

What To Do When Unexpected Expenses Stop Progress Towards Your Goals

Unexpected sh*t happens to all of us.

And the unexpected can derail progress towards goals. 

It can be something minor like the washing machine needs replacing, or it can be significant, like job loss caused by a global pandemic.

So what do we do to get back on track?

First, give yourself grace and know that progress doesn’t have to be all or nothing. If you meant to save $50 this month but only managed $5, that’s ok. It’s still progress that keeps the momentum going.

If you skip a month or two while you’re dealing with the unexpected, then that’s ok too. Hit pause on your goals and then get back on track when you can. 

One strategy that helps you stick to your goals when the unexpected hits are planning and building an emergency fund. That might not help now, but building an emergency fund can be an excellent next goal.

Finally, if unexpected circumstances are long-term, then you might need to reevaluate your budget and reset your goals. Wisdom is to know when to hold them, know when to fold them…it’s ok to be agile to changing circumstances.

These strategies take very little time to implement, but they can significantly impact your finances. What strategies have you used to reach your financial goals?


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  1. Great info and motivation! We are saving for a down payment for a house. I love the ideas you’ve presented here. Our goal is to save $1000 per month through the end of this year. We have been managing $800-900 per month but want to kick it up a notch so that we can start the house hunting in 2022. I am doing a no-spend month that will go to July 10th (and possibly beyond as long as I can.) I have cash back rewards card that I will you that amount to lower the pay in full amount and start adding that saved amount to my savings as if I was paying the card without cash back rewards. I pick up every coin I find, pennies mostly but sometimes nickels, dimes and quarters. I use my change at the grocery store and then my rewards card for the difference. I also take that amount used in coins and round up to nearest dollar and trsf into savings. I have a bank acct that rounds up to the dollar on all my auto pay bills, which amounts to $5 plus every month.
    I will make a game out of it as in your suggestion to maybe amp up $25+ to my monthly savings. I love PB and usually spend $4 a month on that, so PB will be my “sacrifice” and add that to savings. I will look at average electric bills I used to pay myself but the new apt now includes all utilities except gas and trash. Maybe I can add that amt not paying now to my savings and increase even more. Thanks for the ideas, especially like a challenge game.