How to Set Financial Goals Effectively

How To Set Financial Goals Effectively + FREE Printable

How to Set Financial Goals Effectively


When I ask people why do they save, they would always say, “Just because” or “Wala lang” (in Filipino).

That bothers me a bit because not having a reason for doing something is:

  • Not motivational (You are not focused on your goal and you may end up not achieving it.)
  • Ineffective (You may waste time, resources and money in achieving your goal)
  • Superficial (You are not serious about it.)

Are you sure you badly want to achieve your goals? Eyebrow raising look here

I must admit that I was one of these people before. I belong to the clan of people who dream of achieving financial goals, but not setting them effectively or even knowing what they are in the first place.

When I became financially literate, I have learned how to set my financial goals effectively. I learned to define what my financial goals are, tie each of them with a purpose, and plan on how to achieve them. Because I don’t want my goals to remain goals forever.

I just want to share with you how I set my financial goals. If you’ve back read my blog, you would know that I am a sucker of lists. I am a list freak. I cannot proceed with my day in the office without listing everything, well, almost everything that I need to do for the day.

So, right now I’m about to spill my secrets on how to set financial goals effectively. So hush and listen, or er, read.

List your goals

Oh you must have known! I’ll ask you to list your goals down as the first step. Listing is always the first thing to do. Because I said so.

Come on, you must have at least 3 major financial goals in mind. Reflect on thy life. I’ll give you a minute.

For me, I started with 3 major financial goals — emergency fund, healthcare fund and my retirement plan. Make that 4. I had my wedding fund in mind too. I am not engaged yet though. But I do intend to get married. And since I am Miss Ready, I figured I had to save a portion of our wedding fund.

Dissect your goal

You have listed your goals. Brilliant! How does it sound like?

Is it a plain, old, boring “Save a million pesos”?

Saving a million is nice. But why? What do you want it for? Where will you use it?

Again, people whom I’ve talked to (those that didn’t have an idea why they want to save an unknown amount of money) want to make that bunch of money grow just because. It’s confusing, eh? And maybe a little illogical?

So, you. Get back to your goals and dissect each.

It should have the following basic elements:

  • How much?
  • What for?
  • When will you use it?

Here are examples of well-written goals according to me (financial planner wanna be):

  • Start this month to save up Php 100,000 by April 2015 for my 19th birthday party (as if)
  • Pay Php 5,500 for my Kaiser Healthcare Insurance quarterly starting Dec. 2014 for 7 years (better to start early)
  • Secure 3 months (equivalent to Php 90,000) of emergency fund by September 2015

Inspired now, darling? Note that the above goals are fictional. Okay? Good.

Now, work on your own.

Plan on the ‘How’

Now this is the important part. Start with your goal number one. Let’s take my fictional goal for my ahem 19th birthday party: Start this month to save up Php 100,000 by April 2015 for my 19th birthday party

Planning on the ‘how':

If it’s November 2014 now, I’ll only have 5 months to save up for the party. If I need a 100,000 for that, I should save (100,000/5 = 20,000) 20,000 per month or 10,000 bi-weekly or 667 per day. So how could I save 667 per day? That’s my problem.

When you have already determined the breakdown amount that you need to save on for a specific time span, you can start planning the how.

This topic could stretch as there are several ways on working the ‘How’ out. Normally, I would recommend the following vehicles in achieving your money goals:

  • Short-Term Goals (1 yr. below) – Save up plus side hustle
  • Medium-Term Goals (2-5 yrs) – Mutual Fund (Balanced ones)
  • Long-Term Goals (5 yrs +) – Mutual Fund (Equity) or Create a Business

Hunt them down

If you’re a serial dream chaser, you know that it’s not good to just let your list sit. You need to cross the things on your list one by one until nothing is left. It’s good to track your progress. What I do to hunt my financial goals down is to include a financial section every time I join The Nectar Collective’s Weekly Wishes.

As for my financial evaluations, I have trackers on Excel. You can do your own tracking. There are financial apps and software out there like Mint, but I prefer doing everything on my own.

I hope you have learned something from this blah. Now, here’s a financial goal setting worksheet for you. Consider it a gift because you get to the end of my post. *wink*


[Free to Download]

To make your list more customized, insert your name on the header just before the ‘s.

Financial Goal List

Do you have your financial goals set yet?
If no, did this post wanna make you draft one? If yes, how did you set your goals?