Business & Investments

How to Set Financial Goals That You Actually Follow

We've all been there. January 1st rolls around, and you resolve that this is the year you will get your finances straight. You will save better, invest well, and become wealthy. But by March, those ambitious goals are gathering dust alongside your abandoned gym membership.

The problem isn’t your lack of willpower; it’s that most people take the wrong approach to setting financial goals. They develop vague desires rather than practical strategies, set unrealistic objectives, or do not align their desires with their absolute values.

Whether you’re trying to create an emergency fund, begin investing with a CFD broker, or save towards retirement, the rules of a good goal-setting process are the same. Here’s how to set financial goals that actually stick.

Start With Your "Why"

You have to consider the reasons why you need financial security before you even write down a single number. Is it the freedom to travel? The ability to retire early? Peace of mind knowing that your family is safe?

Your reason is what will sustain you when you lose the drive. When the deeper purpose is not there, and you want to save like $10,000, you will find it challenging to put it above instant gratification.

Take the time to imagine what the picture of financial success will be to you personally. Your aspirations must align with your values, not with societal expectations or what your neighbor has done.

Make Your Goals Specific and Measurable

"I want to save more money" is not a goal. It's a wish. Turn imprecise goals into actual ones with figures and deadlines.

Rather than “save more,” try saving $500 per month for 12 months and creating an emergency fund of $6,000 by December 31st. Rather than just saying, “I want to invest”, decide to open a suitable investment account, such as a CFD Broker account, depending on your risk tolerance, and invest a set amount every month.

Specific objectives provide you with a well-defined finish line. You will have a clear indication of when you have made it, and this will have an inspirational effect, and you will be able to celebrate as you make the wins.

Stated objectives also allow you to monitor progress. As you visualize yourself moving closer to your target each month, you stay engaged in positive behavior.

Break Big Goals Into Smaller Milestones

An objective such as saving $50,000 for a house down payment can be overwhelming. The number is so large that it's paralyzing.

Break it down. Assuming you require $50,000 in 5 years, that's $10,000 per year, or about $833 per month. At this point, the impossible feels possible.

Establish quarterly and monthly goals. Congratulate yourself when you reach $5,000, then $10,000, $15,000, and so on. These minor successes give you a psychological victory, which keeps you going in the long run.

This will work towards any financial objective. If trading is your goal, your first milestone might be completing an educational course on CFD trading and understanding its risks.

The second may be opening an account with a reputable CFD broker. Then, maybe the third is making your first little trade. One step leads to another, building confidence and momentum.

Use the SMART Framework

The SMART goal model has passed the test of time as it is effective. Ensure that your financial targets are:

Specific: What is it that you want to accomplish?
Measurable: What will you do to measure your progress?
Achievable: Do you have the income to achieve this?
Relevant: Does this go with your overall life objectives?
Time-limited: Within what time frame will you do this?

An example: “I will grow my investment portfolio by $12,000 by the end of December by investing $1000 each month, simply setting up automated transfers to my trading account, in diversified investments.”

This aim fulfills all the SMART criteria and has no ambiguities.

Automate Everything You Can

Willpower is a finite resource. The more you rely on it, the more likely you are to fail. Remove willpower from the equation through automation.

Install automatic debits from your checking account to your savings account on payday. Arrange regular investments with your brokerage or CFD broker. Automatically pay bills to eliminate late payments.

When your financial system operates on autopilot, you literally achieve success through default, as opposed to the need to be working all the time. You are not even going to see the money before it gets moved into savings.

There is also the emotional aspect of finance that automation eliminates. It is less likely that you will not make contributions once the decision is already made.

Review and Adjust Regularly

Life changes. Income fluctuates. Priorities shift. That’s why your financial objectives are not carved in stone.

Arrange monthly or quarterly financial reports. See how far you have gone in each objective. Are you on track? Ahead? Behind? When you are invariably falling short, it might be that the goal is far-fetched or that you must reduce expenditure.

Don't be afraid to adjust. When you get a salary increase, save more. If unforeseen costs arise, you will have to temporarily postpone or reduce the contributions without abandoning the objective completely.

Periodic reviews help you stay on track and catch small pitfalls before they turn into significant losses.

Build Accountability Into Your System

Disclose your objectives to someone close to you, such as a partner, friend, or financial consultant. When other people are aware of what you are striving toward, then chances are that you will stick to it.

Consider finding an accountability partner who has the same financial objectives. Prepare monthly check-ins to provide progress updates, obstacles, and accomplishments.

Many apps also offer goal-tracking and help you visualize your progress.

Whichever you choose (whether a person or an app), make sure they can hold you accountable.

Align Your Spending With Your Goals

Any dollar that you spend is a vote for the life you want. When your daily spending patterns are at odds with your stated financial goals, the goals will always lose.

Look at your costs honestly. How much are you spending on things that do not support your values or get you closer to what you want to achieve? This does not mean that you should not live well, but conscious spending is preferable to mind-numbing consumption.

Make your budget that prioritizes your goals first, and use the rest of the money at your discretion. When you pay yourself first through savings and investments, you're guaranteed to make progress.

Conclusion

The difference between people who only talk about their financial goals and those who actually achieve them is structure.

Setting financial goals you actually follow is not about being superhuman or depriving yourself of all joy. It has to do with shaping the vision, building smart systems, and staying flexible enough to adjust when life throws a curveball.

It doesn't matter whether you are creating an emergency fund, planning your retirement, or learning to trade with a CFD broker; the basics are the same: keep it specific, automate where possible, divide big objectives into readily manageable parts, and review them.

Start today. Select one financial objective that is important to you. Get specific, give a deadline, and start with a small step. That’s all it takes to begin investing toward the financial future you desire.