Starting on the Road to Financial Security: Setting Financial Goals

Financial security begins with setting financial goals. The process of determining financial goals is described in this NebGuide.

Sandra D. Preston, Extension Educator
Kathy Prochaska-Cue, Extension Family Economist

Getting Started on the Road to Financial Security

Financial security is a dream for most people. To turn that dream into reality, start on the road to financial security by setting financial goals. Taking more control of spending and where money goes can result in surprising accomplishments toward financial independence.

Define What You Want

Money management is about using what you have to get what you want — your goals. No one can have everything, but good management of what we do have can help get the things we want most. Carefully defined goals are those we have already started to accomplish.

Choosing a goal that is personally important helps motivate to work to reach it. Don’t be afraid to set goals that stretch you a bit. After all, the purpose of setting goals is to help you accomplish more with your money than you have in the past.

Maybe you already know what you want to accomplish. Even so, take time to read the rest of this publication and to think about all parts of your life to ensure nothing important is missed. List financial goals that require money, including savings and debt reduction.

Involve Family Members

People always are more willing to help if they have been involved in the decisions. Adults, teens and children all can be involved in discussions about what is most important to the family instead of only the adults making that determination. The possibility of achieving goals increases tremendously when everyone is involved.

Check for Short-Term and Long-Term Goals

Most people have goals that are important to them now and other goals important for the future. Financial experts put goals into three categories for the amount of time it will take to reach them or when money will be available:

Your definition of the timeframes for these categories may be different from what is stated above. That’s fine as long as you are consistent. All three categories of goals aren’t necessary — even some financial experts use only short- and long-term goals. Don’t get hung up on categorizing goals, but do what makes the most sense. Just remember to think of more immediate needs and wants as well as those in the future.

Big-ticket goals that cost more money, such as a comfortable retirement or children’s education, may be possible only by working toward them over many years. Do any of your goals fit this category? If so, you may want to set benchmarks along the way, such as having a certain amount saved for retirement in 5 years, in 10 years, and in 20 years.

Gather Information

Do you need more information before setting your goals? Some examples include:

Ask Yourself About Your Debt

Financial experts would agree that answering “yes” to any of the above questions is a sign of trouble. They recommend that, if you do any of the above, debt reduction be one of your financial goals, possibly the most important one.

Ask Yourself About Your Savings

Evaluate Your Goal

Writing your goal helps you accomplish it. As you write your goal(s), ask yourself two questions:

  1. Is it specific? State exactly what you hope to achieve.
  2. What is the target date for accomplishing the goal? Knowing “when” is important.

Goal-writing Example

A family wants to take a vacation. But that is a very vague goal. What kind of vacation? Saying they want to go to Florida in the summer would be more specific. Better yet, they could decide where in Florida they are going, how they would travel there, how long they would stay and when this vacation will take place: in three months? in a year and a half? Being specific about the goal helps the family effectively plan how to attain it.

Make Your Goal Realistic

Sometimes goals clearly are unrealistic. For example, a family with a monthly income of $3,000 and spending $2,900 a month on basic living expenses would find it unrealistic to save $500 a month for various goals. Unreachable goals may lead to discouragement and giving up. Make sure goals are at least possible even if you do have to stretch a bit to reach them.

If goals seem unrealistic, change them.

Revise your goals by writing them again with specific target dates and dollar amounts.

Use Your Goal to Stretch Your Abilities

Simply writing down a commitment to continue what you are doing already can be useful, but usually people begin down the road to financial security with a desire to increase their savings or reduce their debt. Ask yourself: How much am I saving? How much am I paying on debt?

Rank Your Goals

Most people have many goals. It is important to work hardest on the goals that are the most important to you. Ask yourself (and other family members) this question: If I could work toward only one of these goals, which one would it be?

For example, if you have five goals, you might rank them one through five. Or possibly divide your goals into three groups: highest importance, medium importance and lower priority.

Short-term goals are targeted sooner than long-term goals, but that doesn’t mean they are more important. You can work on more than one goal at a time, but it’s a good idea to be clear about which are your highest priorities.

Create a Goal-setting Checklist

Before you complete your goal(s), ask yourself these questions:

Your Financial Security Goals

Write your goals in the charts for your reference (Figure 1). You also may want to fill out and save the Financial Security “thermometer” chart (Figure 2). Put the “thermometer” where you’ll see it often such as on the refrigerator, taped on the bathroom mirror or around your credit cards in your wallet.

Figure 1. Documenting goals will help achieve them.

Transfer this figure to the Financial Security Thermometer on the back page of this publication.

To help track progress toward paying down debt, visit the Web site at http://paydowndebt.unl.edu.

Figure 1. Documenting goals will help achieve them.
Figure 1. Documenting goals will help achieve them.

Figure 2. The Financial Security Thermometer can help document progress toward your goals at the end of each month.
Figure 2. The Financial Security Thermometer can help document progress toward your goals at the end of each month.

Financial Security — Getting Started

Follow these steps to start toward financial security:

  1. Write down your goal(s).
  2. Put a price on your goal(s).
  3. Set a target date for reaching your goal(s).
  4. Divide and conquer. Decide how much money you will set aside from each paycheck.
  5. Develop a plan for reaching your goal, such as saving $30 each week.
  6. Most importantly, start working on your goal(s) today!


Developing Personal Financial Goals. (2007). In Kapoor, J. R., Dlabay, L. R., & Hughes, R. J. Personal Finance. (pp. 9-12). Boston, MA: McGraw-Hill Irwin.

This publication has been peer reviewed.

Visit the University of Nebraska–Lincoln Extension Publications Web site for more publications.
Index: Financial Management
Money Management
Issued September 2007

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© 2007, The Board of Regents of the University of Nebraska on behalf of the University of Nebraska–Lincoln Extension. All rights reserved.