How to Set Financial Goals You Can Achieve

People often set financial goals, but they fall short of achieving them. Setting financial goals gives you something to work for and helps you focus on your broader financial picture. The best way to set financial goals is to reflect on what you want, write it down, then work towards your goal.

So how do you set realistic financial goals? Let’s look at some of the attributes of good financial goals as well as some tips for achieving success. In this article, we look at some practical tips that will make it easier for you to create realistic financial goals.

What are financial goals?

Financial goals are targets you set to save, invest, or make money. They are financial objectives you are hoping to achieve over time.

Financial goals depend on the age, gender, lifestyle, and career of a person. For example, a college student may set a plan to save up for a new phone, whereas a family guy may be saving up for retirement or his children’s college fund.

Financial goals

Types of financial goals (short-term and long-term goals)

There are three main types of financial goals:

Short-term objectives

These are goals that take under a year to achieve. They include objectives such as paying short-term debts and building an emergency fund, among others.

Medium-term goals

Medium-term goals take at least 3 to 10 years to achieve.

They are slightly more complex compared to short-term goals, but they are achievable.

They include paying off a loan, getting a car, or paying your mortgage.

Long-term goals

Long-term goals take at least 10 years or more to achieve.

They include saving for retirement, your kid’s college education, etc.

Financial goals template
Sample financial goals template

Why you should set financial goals

Financial goals come in handy in the following ways:

1. It allows you to maintain control.

You cannot live your life in the sheer hope that everything will work out the way you want it to. When you set goals, you can live the conscious life you want instead of following the masses. Even plans that seem unattainable now are doable once you get a hold of your finances and life.

2. Ensures that you achieve the best results possible

Where do you see yourself in a year? Ten years?

When you have specific milestones, you want to achieve, you work hard toward them. You make sure that you push yourself to achieve the best results.

3. It creates self-accountability.

Setting goals enables you to be accountable for your life’s choices. Rather than wish your life was better, you now have to act on making your life better. By having set goals, you can easily track your progress and adjust where necessary to keep yourself on track.

4. It helps you live your best life.

Everyone is capable of being the best version of themselves if they try. Setting goals pushes you to achieve the best in life. It also helps you discover your life’s purpose and moves you towards a more fulfilling life.

Examples of financial goals (short-term and long-term)

Despite being personal, some financial goals apply to almost everyone.

Short-term goals

Short-term financial goals include:

a.Create a budget

Setting up a budget is essential because it allows you to take control of your finances and stick to your life’s goals.

b. Build an emergency fund

Because of the unpredictable nature of life, it is vital to set aside money for unforeseen circumstances. An emergency fund should contain 3–6 months’ worth of expenses for such unfortunate situations as losing your job, a pandemic, etc.

This ensures that your savings and investments are not liquidated when the emergency hits.


Longterm financial goals include the following:

a) Saving up for retirement

A sizeable retirement fund ensures that you have a comfortable, secure time in the future when you can no longer work for yourself.

b) Homeownership

Having a place to call your own is very fulfilling. Whether starting with a down payment or paying off your mortgage, owning a home is a desirable financial goal.

How to set financial goals

Setting the right financial goals will change the trajectory of your life. Here is how to set financial goals.

1. Visualize your goals.

Think about your ideal future. What does the life you envision 5 to 10 years from now look like? Once you have that vision, think about how much money you need to make your dreams a reality. Note that you can make these adjustments later, so don’t be afraid to dream big.

2. Categorize them.

Are your goals long-term, medium-term, or short-term?

It is crucial to categorize your goals based on when you want to achieve them. Short-term goals take a shorter time to be accomplished, whereas long-term goals take a lot more planning and time.

3. Prioritize them on a wants-and-needs basis.

Write your goals and, alongside them, label them according to whether they are wants, needs, or luxury items.

This lets you know which ones are prioritized and which can wait. For example, creating an emergency fund is essential, whereas getting a better car is a luxury.

4. Add to your goals

Goals, especially short-term goals, are easily achievable. This is why it is crucial to evaluate your goals once in a while and add new ones you want to achieve.

How to achieve financial goals (develop a goal chart)

The most effective way to achieve smart financial goals is to develop a foolproof plan that prioritizes your needs.

You can also develop a goal chart. A goal chart is a visual representation of one’s goals and the methods that will be used to achieve those goals.

Here are steps for setting up a personal goal chart:

I. Write down a goal using the SMART model

Your goals should have the following attributes:

  • Specific

The goals you want to achieve should be clear, with a timeline and the resources you will need to be outlined.

  • Measurable

You should be able to measure progress. This will show the individual the progress they have made over time.

  • Attainable

Set goals that are achievable.

  • Realistic

Make sure the goal you set is within reach and the resources you need to achieve it are available.

  • Time-bound

Define the timelines you need to achieve the goals. For example, if you want to save Ksh 1 million, indicate when you should achieve this goal.

II. Decide if the goal is long-term or short-term.

By determining how much time the goal will take, you can plan financially.

III. Determine ways to reach your goals
Once you have chosen a goal, look for ways to get the income you need to achieve the goal. This could be done either by cutting costs or by increasing your income streams.

Tips to help you set your goals

No matter the goals you are aiming to achieve, set realistic goals. Here are tips that will help you set and achieve your goals:

1. Focus on goals you are passionate about.

Remember, these goals are solely yours. Nobody will ever know you more than you do. Use this to introspect and choose goals that make you want to get up in the morning.

They should give you a sense of fulfillment once you have achieved them. Whether it is improving your life, career, relationships, health, or even DIYs,

They can be long-term or short-term.

2. Ensure that you set achievable goals.

There’s nothing as frustrating as aiming for something you know you won’t achieve. Not only is it demotivating, but it’s also a waste of your time and effort.

Therefore, ensure that your goals are within reason.

3. Choose the goals you want to prioritize.

It is essential to re-evaluate what is important to you. Based on the stage of life you are in and the career path you have chosen, different priorities will take a separate chunk of your salary.

For instance, if you’re married and have kids, your kids’ college funds or maybe even your retirement are priorities for you. In contrast, if you are fresh out of college or university, your priority may be to furnish your new home or pay off your student loans.

4. Create a budget

By creating a budget, it becomes easier to determine where you are financially and where to go. A budget helps you apportion your income appropriately, and you can set goals based on where you are financial.

5. Set deadlines

When coming up with your financial goals, it is crucial to choose a time frame for your goals.

6. Review your goals monthly, quarterly, or semi-annually.

Depending on the type of goal you set, review your goals to see the progress you are making, readjust, and improve. By doing this, you will be able to refine your goals and make them easier to achieve.


Determining your income is the first step in determining your financial goals. Write down your monthly expenses and then create a plan to get you where you want to be. Our advice when it comes to defining financial goals is all about finding the right balance. It’s important to set realistic goals. If you set goals that are so easy that you could achieve them with your eyes closed, what’s the point?

If you want to define new personal financial goals for yourself for the coming year, think about your income and expenses for the year, and determine what numbers would represent a significant change in either direction.

Would adding a certain percentage to your income or cutting back on a specific expense help make 2022 more financially manageable? By setting both short-term and long-term goals and meeting them, you help set the tone for future steps toward financial stability and growth.

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