I'm Karen!

I am a blogger and finance coach. My specialty is helping couples get on the same financial page and win with money and marriage. 


Personal Finance


Financial Planning

Setting Financial Goals

Setting meaningful financial goals may be the smartest thing you do that will provide you with financial security and freedom in the future.

You can spend a lot of time focusing on your financial situation but unless you have specific goals you may struggle to change your current situation. Goal setting is an important part of developing your financial plan. Having clear financial goals will make it easier to focus on reaching those goals.  It will also help you track how well you are doing along the way.  

The very essence of goal setting empowers you to navigate your unique financial path with confidence and intention. Yet, over the years, I’ve observed that many people tend to neglect the profound impact of setting money-related goals.

If you’ve ventured into goal setting in the past but found yourself falling short of your ambitions, I encourage you to embrace a positive mindset.

Let’s delve into the world of goal setting, exploring its significance and your personal connection to it.

🌟 What are your thoughts on setting goals?

🔄 Is it a regular practice in your life or something you’ve never really ventured into?

✨ Can you share an area in your life where you successfully set and achieved a goal?

💪 How did that accomplishment make you feel?

🛠️ What specific actions or changes did you make to reach that goal?

😔 And on the flip side, how do you cope when you fall short of a goal?

Financial goals serve as your monetary compass, guiding you towards your aspirations and dreams. These goals encompass a diverse range of objectives, whether they involve accumulating a specific sum of money or financing your most cherished life experiences.

Financial Goal Setting

Setting Financial Goals 

In essence, financial goals can be categorised into two main types:

Short-term goals: These are the aspirations you aim to fulfil in the near future, typically within a year or even sooner. Whether it’s saving for a holiday or getting your finances in order, short-term goals offer the satisfaction of quicker accomplishments.

Long-term goals: These are the ambitions that require you to adopt a broader perspective, setting your sights on the bigger picture. Your long-term financial goals may encompass plans you want to realise in two years, a decade, or even several decades from now. Whether it’s homeownership, retirement planning, or securing your children’s future, long-term goals often define the course of your financial journey.

Identifying these goals is the first step towards crafting a strategic financial plan, aligning your resources and actions to make your dreams a reality. So, whether it’s the allure of a six-figure income, monthly savings targets, or realising your dream holiday, your financial goals are the compass by which you navigate your financial future.

Application: What are some things that you’d like to accomplish in the next 12 months?

Complete this sentence: It would be great if______________________ . 

Find your inspiration

Think not just about what you want to do, but why you want to do it. Attaching reasons to your goals can put them in perspective and fuel motivation. For example:

Build up an emergency fund so you can afford to pay rent if you lose your job.

Get rid of credit card debt so you can put your income toward a wedding instead of interest payments.

Examine your situation

After giving it some thought, you may have multiple goals in mind and don’t know what to do next. Or maybe you don’t have specific goals. That’s OK. Looking at where you stand right now can help set you on the right trajectory, whether your ambitions are short term, long term or have yet to be identified.

Start by assessing your income, budget and net worth. Having an understanding of these three things will help determine goals and prioritisation of those goals.


Consider all the necessary pieces of your plan — not just the goal, but the steps you’ll take to reach it. A strong basis for setting any goal is to make sure it’s “SMART”:

  • Specific
  • Measurable
  • Achievable
  • Realistic
  • Time-bound

Embracing SMART goals like this transforms abstract desires into concrete action plans, offering a roadmap to financial success

Look at the details

Dreaming of a well-deserved holiday? It’s essential to get the details in order before embarking on your savings journey. Here’s how to transform your travel dreams into a practical and achievable reality:

Select Your Destination: Start by picking the destination you’ve been yearning to explore. Whether it’s a tropical paradise, a cultural immersion, or an adventurous escape, the first step is to set your sights on a specific place.

Set a Timeframe: Determine when you want to embark on this journey. Is it a short-term plan or something you envision in the more distant future? Establishing a timeframe is crucial for planning and saving.

Estimate the Costs: Research and estimate the total expenses for your trip, including flights, insurance, accommodation, food, activities, and any unexpected contingencies. This will give you a target amount to work towards.

Assess Feasibility: Now, take a close look at your current financial situation. Does your income, savings, and existing expenses make this goal doable in the given timeframe? Be honest with yourself about what’s realistic.

Make Adjustments: If it appears that the goal is slipping out of reach, don’t give up on your dream. Instead, consider making necessary adjustments. You could extend your savings timeframe, automate your savings to ensure consistency, or explore options like opening a savings account with a higher interest rate and a sign-up bonus. These strategies can help expedite your progress.

By laying out the details, assessing feasibility, and adapting your approach when needed, you can turn your holiday aspirations into a practical plan that aligns with your financial reality.

SMART goal example

When it comes to setting financial goals, precision is paramount. A vague goal like “being financially secure” can be challenging to quantify or track progress. How will you ever know if you’re making headway or have truly achieved your objective?

On the other hand, consider this SMART goal: “Saving £75 each month over the next five years, accumulating a total of £4,500 in an emergency fund.” Let’s break down why it’s SMART:

Specific: You have crystal-clear clarity about what you’re saving for – an emergency fund.

Measurable: With a set amount of £75 per month, the goal is quantifiable and trackable. By the end of five years, you’ll have reached £4,500.

Achievable: The question to ask is, is saving £75 each month achievable for you based on your current financial situation? Is it a target that can be tailored to your means?

Relevant: This goal is intrinsically linked to achieving financial security, making it relevant to your financial well-being.

Time-bound: With both monthly and five-year targets, you have a clear time frame in which to work. It provides a sense of urgency and direction.

Embracing SMART goals like this transforms abstract desires into concrete action plans, offering a roadmap to financial success.

Here are a few financial goals that I would personally recommend that you start with:

Create a budget

If you don’t have a budget, make one. This can keep all your money goals on track by preventing overspending and under-saving. 

If you need help creating a budget, read my blog on why budgeting is essential. It tells you why you need to budget and how to budget too!

You could also check out my very simple Excel Spreadsheet. It’s designed to help people who are totally overwhelmed when it comes to budgeting. Therefore, it’s really simple to use and it is exciting to see the progress that you are making each month.

Pay off debt

Focus on paying off your debt.

There are two trusted methods: the avalanche method and the snowball method.

To find out more read Debt Snowball v Debt Avalanche.

Building Your Financial Safety Net

Establishing a robust emergency fund is essential to protect yourself from unexpected financial setbacks, whether it’s an unforeseen expense or job loss. To begin, aim to have £2000 readily available, which can cover many unexpected costs. In the long run, it’s wise to save enough to cover three to six months’ worth of your essential expenses.

Planning for Retirement

Even though retirement might seem distant, it’s crucial to commence your savings journey as early as possible to ensure a comfortable future. Most experts advise setting aside 15% of your gross income each year. If your employer offers a workplace pension scheme, make the most of it, especially if they match your contributions – it’s essentially free money. Consider your individual circumstances, whether you’re managing your finances independently or in collaboration with your spouse.

How to achieve your financial goals

Now that you know your financial goal, write it down! This can keep objectives clear, organised and tangible. Fill out a worksheet or spreadsheet, or use a notepad. Check in periodically and track your progress. Once you’ve crossed off one goal, move on to the next.

While you are working towards your financial goal, remember your why.

To help us remember our ‘Why’, we have made posters and placed them in almost every room of the house. The word ‘Why’ is placed in big letters in the centre, and surrounding the word are pictures of our ‘Why’. This helps us to keep our eyes fixed on the goal! 

Treat yourself

Setting goals doesn’t have to feel like a chore. If your financial goal is a long term goal, for example, our goal is to build up an emergency fund of £25,000. It’s definitely a long term goal! So, every time we reach £1000, we celebrate by going out for a milkshake or a beer (depending which family member you are!).

Rewarding yourself when you reach those small wins is really important for continued motivation.

Once you’ve tackled high-priority goals like clearing all debt (apart from the mortgage), building an emergency fund and saving for retirement you can focus on more exciting goals. These might include investing, working from home, starting a business or saving for a major purchase like a car or house.

If your financial goal is to start investing, then be sure to read my good friend, Ashima’s blog on Investing Money for Beginner with Limited Funds.

In summary, it’s crucial to define your financial objectives and to have a clear purpose in mind. Keep in mind that achieving a financial goal is impossible if you haven’t established one. It’s not a matter of planning to fail; rather, it’s failing to plan, especially when it comes to setting specific financial goals.

If you would like to invest in yourself and work with me to improve your current financial situation, I offer a FREE Q&A call (no obligation!) if you would like to find out a bit more about the benefits financial coaching can offer and how I might be able to support you.

Every client who has ever invested in coaching with me, has become more financially stable and money confident as a result. So leave a comment below or email me today hello@moneyandmarriage.net and let’s book a call!

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