How to Set Financial Goals

If you want to improve your finances, one of the first steps is to set financial goals, milestones that you choose based on what you want to achieve with your money. These goals are different for everybody—one person might be focused on saving for the future, while another might want to pay down debt. Most people have multiple financial goals they’re working toward at any given time.

The key to achieving your financial goals is making sure you’ve set realistic and achievable targets. The more specific you can be about these goals, the better. So, instead of setting a vague goal to save more money, your goal might be to transfer $100 every month into a savings account.

Short-Term vs. Long-Term Goals

Short-term financial goals are those you can realistically expect to achieve in the next three to five years. These might include paying off a credit card or building an emergency savings account.

Long-term financial goals focus on things you want to achieve with your money decades from now. That might include helping your children pay for college or saving to start a business. It can help to break down longer-term goals into shorter, more achievable milestones. So, you might aim to put a certain amount each year into your savings account, keeping the long-term picture in mind.

By using Smart Savings from a Fifth Third Momentum^® Savings Account, you automatically can save specific amounts of money throughout the week, which can help you reach your short-term and long-term financial goals.

Use Goals to Achieve Financial Security

Your goals should be specific to your own financial situation and life goals. Here are a few ideas to help you achieve your short-term and long-term financial goals:

• Spend less than you earn. Living within your means is one of the most important factors in financial security. To get started toward this goal, you might create a budget and then challenge yourself to stick to it each month.
• Build an emergency fund. Having at least three months’ worth of expenses set aside in an easily accessible savings account can eliminate the stress that can come with an unexpected bill like a car breakdown or a leaky roof.
• Pay off high-interest credit card debt. Carrying a balance on credit cards—and paying interest on it—can cut into your cash flow and make it hard for you to meet your other financial goals. Once you’re living within your means, you can start dedicating your extra cash toward getting rid of this debt.

While achieving your financial goals—no matter what they are—may feel daunting, simply identifying your goals is an important first step. Even if you don’t immediately hit the goals you’ve set, simply making progress toward them is something to celebrate.

Need help establishing your financial goals? Schedule time with one of our bankers.