Ready to achieve your financial goals and build the rich life you're dreaming about? Laura covers seven steps to reach your money goals faster, figure out what they should be, and stay motivated for the long haul.

17 minute read

Achieving your financial goals is all about getting one step closer to the life you daydream about where you feel happy, secure and on top of the world. In this podcast, we’re going to talk about why you need to set financial goals.

I’ll give you a specific method to create them, giving you the greatest chances of success, and clever ways to achieve your goals as fast as possible, and have goals that feel fun and motivating, not restrictive, or boring. Hey, everyone, and thanks for joining me this week.

I’m Laura Adams, personal finance and small business expert and author who’s been right here hosting the money girl podcast every week since 2008. My mission for the show was to help you get the knowledge and motivation to prioritize your finances, build wealth, and have more security and less stress. Each podcast is kind of like a mini tutorial, like a class where we cover money hacks, new ways to earn more, save more. Or we might hear from an industry expert on a specific financial or small business topic, you’re going to come away with practical advice for taking your financial wellness to the next level, and know how to make better money decisions. So I would love for you to subscribe to the show. If you haven’t done that already. And of course participate, you can send me your money, questions or comments, I’m going to cover your questions at the end of each show. So send them in by leaving a voice message 24/7 on airline, all you have to do is call three zero to 3640308. And if you don’t want your voice on the show, you can just tell me that you can also email me using my contact page at Laura D adams.com. Or connect with me on Instagram at Laura D Adams. And we always publish a companion blog post that’s called the show notes in the money girl section at quick and dirty tips.com.

Today’s episode is number 702 called Seven Steps to achieve your financial goals faster. So let’s talk about why you need goals. I mean, you know, for a lot of people that may sound sort of fundamental. And while everyone is different, we’ve all got things that we want, you know whether it’s a new car, home remodel, no more student debt, a secure retirement, maybe going on a vacation around the world. I mean, we’re all so different.

We all have different goals. So you need to identify yours. And the problem is that very few people actually make a plan to achieve what they want. Instead, they kind of wander around aimlessly, just hoping that one day all of these things that are in their head, are just going to magically happen. So I want to invite you to dream with me for a moment. What if you decided right now to get serious about using your money to build the dream life that you crave? What if you committed to setting financial goals and creating a crystal clear plan for achieving them, you’ve only got a finite amount of money to work with each month.

That’s true for all of us. So using that money to reach your goals is critical for building a life that you love and enjoy. So that’s why financial goal setting is so important. It really lays the foundation. And I’m going to talk about seven steps to achieve your financial goals as quickly as possible. So let’s get into it. Number one, write down your financial goals. And maybe if you don’t write them, if you type them into a document into some kind of digital format, I want to ask you, Who do you think is more likely to achieve their goals? Someone who just has a vague idea of what their goals should be? Or someone who’s put them clearly down in writing? Yeah, you get it, the person who writes them down is definitely more likely to achieve the goals because they thought them through they formulated them they’ve you know really clarified what their goals are. In fact, a study found that you’re 42% more likely to achieve your goals if you write them down. So it’s pretty cool, right?

Simply by doing that, you’re going to increase your chances of success significantly. So take 30 minutes today or even 15 minutes today to write down your financial goals or type them into a Google Doc or into a spreadsheet. Aim High, hold nothing back. Maybe you want to save for an amazing vacation. Maybe you want to start a joint venture, maybe you want to buy an investment property.

Maybe you want to increase your income invest for your kids college education or increase your cryptocurrency holdings, whatever your goal is, write it down, no matter how out of reach it may seem to you right now. So that is step number one, get it down in a digital form or literally on a piece of paper.

Alright, step number two is to create SMART goals. So smart is a classic goal setting technique that helps you increase your chances of success. SMART stands for specific, measurable, achievable, realistic and time based. Let me give you an example. Let’s say you write down, I want to save more for retirement. Well, I mean, that’s a good goal, but it does not create a specific roadmap for how you’re going to do it. But if you use the Smart formula, it will prompt you to go deeper. So here’s what I’m talking about. So for the S specific, he may say, I want to max out my 401k.

This year, the maximum amount I can save is $19,500. That’s pretty specific. The M and smart is measurable, it might be you jot down, I will adjust my income tax withholding at work on Monday, so that I can put $812.50 of my bi weekly paycheck in my 401k that will allow me to save $19,500 This year, that’s pretty measurable. So you’re either doing that on a bi weekly basis with your paycheck or you’re not you can measure if it is getting done, the A in Smart is achievable. So you might put down, I will achieve this financial goal by reducing my monthly expenses and saving any bonuses or overtime pay I receive, realistic as they are, I will reduce my monthly expenses by eating out only once a week and reducing the data limit on my cell phone plan. So those are some ways that you might make it realistic for you.

And the last t is time based, I will accomplish my goal of maxing out my retirement account by the end of the year you put a specific timeframe on it. So at that time, you know that you either achieve the goal or you didn’t. You can use this smart formula to create short term or long term goals. For instance, you might want to save a certain amount within a few months to take a vacation before the end of the year. Or you may have a dream to save $5 million for retirement over many decades. Alright, the third step is track your cash flow. How much money do you make each month? How much do you spend each month? Knowing the answers to those questions is what it means to track your cash flow.

The easiest way to monitor your income and expenses is to use a budgeting app. Now, before I lose you with the budget word, I don’t believe that budgets should be super restrictive. In fact, I prefer to use the term spending plan because you should have a plan for where your money will go each month. Back in podcast number 700. Just a few weeks ago, I covered 20 best personal finance and small business digital tools, you’re gonna find some really great technology in that show that you can use to track create, you know, monitor your budget or your spending plan. So I would encourage you to check out that show and choose out one or more tools to try out.

Number four, allow flexibility in your spending. So when you get started with your financial goals, you’re probably going to feel really fired up and motivated, you’re going to be willing to cut out loads of expenses or you know, do whatever it takes to get there as quickly as possible. But if your financial goals are significant, and they challenge you the shine of making those sacrifices to achieve them, is probably going to start to wear off within a few months into your journey. You might lose a little steam and wonder, you know, why am I depriving myself of everything now when retirement seems so far away? Well, the secret to staying motivated is to leave a little wiggle room in your spending plan for things you enjoy. And I’m going to talk more about that in a moment. So again, allow some flexibility in your spending.

Number five, increase your disposable income. Disposable income is what you’ve got left over to spend after taxes. So obviously the more disposable income you have, the faster you can achieve your financial goals. So I would encourage you to brainstorm ways to boost it by increasing your gross income or decreasing your expenses or ideally doing both. So consider negotiating a raise with your boss or going for a promotion. You might want to start a side hustle, you could Declutter Your Home and sell any excess stuff that you’re not using on Poshmark or eBay to increase your income. To decrease your expenses. Try cutting out things like subscription services. You might want to try cooking at home or creating a debt reduction plan to slash your interest expenses. And if you’re interested in starting a side hustle, I definitely want to recommend that you check out my latest book. It’s called Money Smart solopreneur a personal finance system for freelancers entrepreneurs and side hustlers.

It is an Amazon number one new release and it’s going to give you everything that you need to get your side business. Are your you know, your side gig up and running and make sure that you’re doing everything that you need to do. And I would say personally, for me, having business income, whether it’s a full time business or side income has really been the secret for me being able to invest more and to have more wealth over the years.

So don’t ever underestimate the ability to, you know, earn a second source of income or you know, have a completely different source of income with new opportunities. Alright, step number six is reward yourself and significant milestones. Most financial goals are pretty, you know, pretty challenging. So in addition to being flexible, and leaving a little wiggle room, in your cash flow for things you enjoy, you may also want to create a system where you reward yourself when you hit some significant milestones. For example, let’s say your goal is to build a $10,000 emergency fund, you might break that down into four smaller milestones, like, you’re going to save 2500, then you’re going to say 5000, then you’re going to have 7500, and then 10,000, you might give yourself something special after you hit each one of those smaller milestones.

You know, maybe it’s getting a massage, buying a new book, or going out for a great meal, whatever, you know, gets you excited, make sure that you are really rewarding yourself for the good work that you’re doing. Alright, step number seven, find an accountability partner. So beyond writing down your goals, monitoring your cash flow, and just you know, putting in the hard work, the most important thing you can do to reach your dreams is sharing them with other people. Telling people you trust about what you genuinely want to achieve with your money reinforces your goals, and it actually creates some accountability to make sure that you do them. It also gets other people interested in seeing you reach your dreams. So think for a moment, who is the right person to keep you fired up and motivated to achieve your financial goals? Who would give you a little nudge when you get off track who’s going to be honest with you, maybe it’s a family member, a friend or even an online community of like minded people, maybe you’ll find that in my private Facebook group called dominate your dollars. That’s a really great group of people who are asking good questions. They’re achieving great goals. And I think that is a fantastic community to help make sure that you stay motivated.

Now, a lot of you may be thinking, Well, Laura, I’m just not sure what my financial goals should be, or maybe what order I should achieve them. I’ve got 10 ideas for you here. And really, I’m going to give them to you an order of priority. So number one is build a cash reserve. This is so important so that you can handle unexpected financial emergencies, you want to make this one a priority, you’ve got to achieve this goal first, so you won’t be caught off guard by something unexpected, like losing your job having an expensive medical bill or needing a car repair. Alright, the second goal to consider is to max out your employer’s 401 K match. So not necessarily the full 401 K but but just contribute enough to get the match, because that’s free money.

Getting the max is going to vary depending on what’s offered in your workplace, but it might translate into saving two or 3% of your income. Number three, increase those contributions to your retirement account. So as you can bump up those contributions every year, that’s going to make sure you build security for the future. And if you don’t have a 401k at work or you’re self employed, you can open your own retirement account, it could be an individual retirement account, that’s an IRA. Or maybe if you’re self employed, you might be looking at a SEP IRA or solo 401k. whatever type you use, slowly boost your retirement contributions until you max out the account. Alright, the fourth goal to consider is to max out a health savings account or HSA that can really cut the cost of health care. But you’ve got to have an HSA eligible health plan to qualify, it will allow you to pay for a variety of medical expenses on a tax free basis. Alright, the fifth goal to consider is like I mentioned increase your income so you’ve got more disposable income to save and invest. I would encourage you to check out a prior podcast number 650 called five tips for building a side business that will give you some ideas and inspiration to create an additional source of income. All right.

Goal number six to consider is pay off your high interest debt that will reduce your interest expense as much as possible. And if you need a step by step guide to create a debt reduction plan do not miss my best selling online class called get out of debt fast a proven plan to stay debt free forever, you can find a link in the show or you can find a link to that course, at my website, Laura D adams.com.

It will really jumpstart your debt reduction plan. Goal number seven to consider is purchase insurance you need to fill any coverage gaps that you may have, such as a health plan, term life insurance, or Long Term Disability Insurance insurance is so important for protecting everything that you’ve worked so hard to build. So don’t go without key policies.
Goal number eight, save for your next vacation so you can pay for it in cash instead of credit.

Goal number nine might be saving for a home down payment. Now Owning a home is not for everybody. But if it is something that you want to do, the more that you can save now, the more you can reduce your monthly mortgage payment and interest later on. And goal number 10 might be contributing to a 529 savings plan. That is a tax advantaged account that you can use to pay for college expenses for you or a child, or even up to $10,000 a year for private school for a child. If you can choose one or two, either short or long term goals that you can tackle this year.

I promise you, your financial life will leapfrog. And your very happy future self will thank you. So I hope that will get you jump started to be thinking about goals. Now let’s get on to your questions. I’ve got a couple here to cover. The first one comes from Russell who says, First thank you so much for your show and what you do, I recently discovered your podcast and can’t get enough of it. What I love most about it particularly in comparison to other financial podcasts is how short and succinct each of your podcast is there’s no fluff and each podcast is very well titled so that I can pick and choose what I want to learn.

I’m a W two employee falling in the highest tax bracket and on a fairly good financial footing. I have no debt except my primary mortgage. I’ve got five months expenses set aside in cash as an emergency fund, I max out my 401k. I’ve got a backdoor Roth IRA, and I max out an HSA every year and generally invest a healthy amount in taxable accounts. Here’s my question. As I say for certain short to medium term goals, such as buying an investment property or a new car, for example, where should I put that money? Assuming that it would take me about two years to reach my goal? Should I just put the cash in a savings account? Or are there other options that might offer better rates of return?

What if I invested into an s&p 500 index fund each month with the cash I’m saving for a goal that I want to reach in about two years I’m thinking that since this is not an emergency fund, if it wasn’t a good time to withdraw the money, I could theoretically delay for a year or so any other options you would recommend? Well, Russell, thank you. Thank you for your kind words about the show. That’s just awesome feedback. And that’s exactly why I keep producing the show week after week with no fluff. As you mentioned, I love your question. And I think it fits super nicely with today’s topic.

First of all, congrats on doing so. So well with your finances by having a cash reserve maxing out multiple tax advantaged accounts and still investing more in taxable accounts, you’re in a really good position. So I’m gonna send you a virtual high five right now you are doing great. Since you’ve got an emergency fund, which I’m assuming isn’t a super safe place like a bank savings account, because you said it was in cash, you have a lot more latitude for handling money dedicated to your short term goals, which I generally define as less than two to three years. And I totally understand wanting to earn more than a fraction of a percent on that money, while also keeping it relatively safe. So here are some ideas, you might keep all or a portion of it in a high interest savings account. If you go to a comparison site such as finder.com, you can find a review of the best accounts.

For instance, right now the best option is paying point 7% on balances up to $10,000 and point four 5% on amounts above 10,000. This account has no annual fee. Now I know that’s still not stellar, but it’s definitely going to be a typical savings account. Another option is putting the funds in a short term CD, such as a 12 month product or maybe even a 24 month product if you know you won’t need the money for two years. However, right now, they’re paying about the same as the best high yield savings rate that I mentioned. So that’s not going to do you any good. It would be better just to have it in a savings account rather than lock it up in a CD. And as you mentioned, you could invest all or a portion of your money

Achieving your financial goals is all about getting one step closer to the life you daydream about, where you feel happy, secure, and on top of the world.

In this post, I’ll walk you through how to set and achieve your unique financial goals. You’ll learn clever ways to achieve them that feel fun and motivating, not restrictive or boring.

7 steps to achieve your financial goals faster

  1. Write down your financial goals.
  2. Create SMART goals.
  3. Track your cash flow.
  4. Allow flexibility in your spending.
  5. Increase your disposable income.
  6. Reward yourself at significant milestones.
  7. Find an accountability partner.

Here’s what you need to know to use these 7 steps to set and achieve your financial goals faster.

Why you need financial goals

While everyone is different, we all have things we want, such as a new car, a remodeled home, no more student loan debt, and a secure retirement. But the truth is, very few people make a plan to achieve what they want. Instead, we wander around aimlessly, hoping one day they’ll magically happen.

But dream with me for a moment. What if you decided right now to get serious about using your money to build the dream life you desperately crave? What if you committed to setting financial goals and creating a crystal clear plan for achieving them?

You only have a finite amount of money to work with each month. Using it to reach your goals is critical for building a life you love and enjoy. Here are the seven steps to do it.

1. Write down your financial goals

Who do you think is more likely to achieve their goals, someone who has just a vague idea of their goals or someone who has put them clearly down in writing? You got it: The person who writes them down. A study found you’re 42% more likely to achieve your goals if you write them down. Pretty cool, right?

Take 30 minutes today to write down your financial goals. Aim high and hold nothing back! Maybe you want to save for a vacation, start a joint venture, or buy an investment property Perhaps you want to increase your income, invest for your kids’ college education, or increase your cryptocurrency holdings. Whatever it is, write it down no matter how out of reach it may sound right now.

2. Create SMART goals

SMART is a classic goal-setting technique that helps increase your chances of success. It stands for specific, measurable, achievable, realistic, and time-based.

If you write, “I want to save more for retirement,” that doesn’t create a roadmap for how to do it. But if you use the SMART formula, it prompts you to go deeper. Here’s an example:

Specific: “I want to max out my 401(k) this year. The maximum amount I can save is $19,500.”

Measurable: “I will adjust my income tax withholding at work on Monday, so I put $812.50 of my bi-weekly paycheck in my 401(k). That will allow me to save $19,500 this year.”

Achievable: “I will achieve this financial goal by reducing my monthly expenses and saving any bonuses or overtime pay I receive.

Realistic: “I will reduce my monthly expenses by eating out only once a week and reducing the data limit on my cell phone plan.”

Time-based:

“I will accomplish my goal of maxing out my retirement account by the end of the year.”

You can use this SMART goal formula to create short-term and long-term goals. For instance, you might want to save a certain amount within a few months to take a vacation, or you may have a dream to save $4 million for retirement over several decades.

3. Track your cash flow

How much money do you make each month? How much do you spend? Knowing the answers to those questions is what it means to track your cash flow.

The easiest way to monitor your income and expenses is to use a budgeting app. Now before I lose you, I don’t believe that budgets should be super restrictive. In fact, I prefer to use the term spending plan because you should have a plan for where your money will go each month.

In 8 Best Budgeting and Personal Finance Tools, I cover some of my favorite budgeting and money tools. Check it out and choose one or more tools to try out.

4. Allow flexibility in your spending

When you get started with your financial goals, you’ll probably feel fired up and motivated. You’ll be willing to cut loads of expenses and do whatever it takes to get there as quickly as possible.

But if your financial goals are significant, the shine of making sacrifices to achieve them may start to wear off a few months into your journey. You’ll begin to lose steam and wonder why you’re depriving yourself of everything now when the finish line seems so far away.

The secret to staying motivated is to leave wiggle room in your spending plan for things you enjoy, and I’ll talk more about that in a moment.

5. Increase your disposable income

Disposable income is what you have leftover to spend after taxes. The more disposable income you have, the faster you can achieve your financial goals. So, brainstorm ways to boost it by increasing your gross income or decreasing your expenses, or both.

Consider negotiating a raise with your boss, starting a side hustle, or decluttering your home and selling the excess on Poshmark or eBay to increase your income. To decrease your expenses, try cutting out subscription services, cooking at home more, or creating a debt-reduction plan to slash your interest expenses.

6. Reward yourself at significant milestones

Most financial goals are pretty significant. In addition to being flexible and leaving wiggle room in your cash flow for things you enjoy, you may also want to create a system where you reward yourself when you hit significant milestones.

For example, let’s say your goal is to build a $10,000 emergency fund. You break it down into four smaller milestones to save $2,500, $5,000, $7,500, and then $10,000. You might give yourself something special after hitting each one, such as getting a massage, buying a new book, or going out for a great meal.

7. Find an accountability partner

Beyond writing down your financial goals, monitoring your cash flow, and putting in the work, the most important thing you can do to reach your dreams is sharing them with others. Telling people you trust about what you genuinely want to achieve with your money reinforces your goals and creates accountability. It also gets other people interested in seeing you reach your dreams.

So, think for a moment. Who’s the right person to keep you fired up and motivated to achieve your financial goals? Who will give you a little nudge when you get off track? It could be a family member, a friend, or even an online community of like-minded people.

10 Financial Goals You Should Set 

If you’re not sure what your financial goals should be or in what order you should achieve them, here are ten ideas.

  1. Build a cash reserve so you can handle unexpected financial emergencies. Make it a priority to achieve this goal first so you won’t be caught off-guard by something unexpected, such as losing your job, having an expensive medical bill, or needing a car repair.
  2. Max out your employer’s 401(k) match to get the benefit of free money. Getting the max varies depending on what’s offered in your workplace but may translate into saving 2% or 3% of your income.
  3. Increase contributions to your retirement account and build security for the future. If you don’t have a 401(k) at work or you’re self-employed, you can open your own account, called an individual retirement account or IRA. No matter which type you use, slowly boost your retirement contributions until you max out the account.
  4. Max out your health savings account (HSA) to cut the cost of healthcare. If you have an HSA-eligible health plan, this account allows you to pay for a variety of medical expenses on a tax-free basis.
  5. Increase your income so you have more disposable income to save and invest. Check out 5 Tips to Build a Side Business for ideas and inspiration to create an additional income source.
  6. Pay off your high-interest debt to reduce your interest expense as much as possible. If you need a step-by-step guide to create a debt reduction plan, don’t miss Laura’s best-selling online class, Get Out of Debt Fast: A Proven Plan to Stay Debt-Free Forever.
  7. Purchase insurance to fill any coverage gaps you may have, such as a health plan, term life insurance, or long-term disability policy.
  8. Save for your next vacation so you can pay for it in cash instead of credit.
  9. Save for a home down payment to reduce your monthly mortgage payment and interest.
  10. Contribute to a 529 savings plan to reduce taxes on college expenses for you or a child.

If you choose one or two short- or long-term goals and tackle them this year, your financial life will leapfrog, and your happy future self will thank you.

This article originally appeared on Quick and Dirty Tips.

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About the Author

Laura Adams, Quick and Dirty Tips

Laura Adams, Quick and Dirty Tips

Laura Adams is an award-winning author of multiple books, including Money Girl’s Smart Moves to Grow Rich. Her newest title, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, is an Amazon No. 1 New Release. Laura’s been the writer and host of the popular Money Girl Podcast, a top weekly audio show in Apple Podcasts, since 2008. She’s a frequent source for the national media and has been featured on most major news outlets including NBC, CBS, ABC FOX, Bloomberg, NPR, The New York Times, The Wall Street Journal, The Washington Post, Money, Time, Kiplinger’s, USA Today, U.S News, Huffington Post, Marketplace, Forbes, Fortune, Consumer Reports, MSN, and many other radio, print, and online publications. Millions of readers and listeners benefit from her practical financial advice. Her mission is to empower consumers to live richer lives through her podcasting, speaking, spokesperson, teaching, and advocacy work. Laura received an MBA from the University of Florida. Visit LauraDAdams.com to learn more and connect with her.

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