7 Reasons You Need to Set Financial Goals

important to set financial goals

Why is it important to set financial goals? Here are 7 reasons why you should set financial goals.

I’ve spent most of my life grappling with budgeting, savings, and debt due to the lack of a solid financial foundation.

So, when I first when I started learning about personal finances, sticking to a budget felt impossible. I hated budgeting and I started out with zero knowledge about managing money!

My primary goal then was to take control of my finances and hopefully get out of debt. So, I fixated on the end goal – becoming debt-free.

I worked diligently to create and stick to a budget because it was crucial for reaching my ultimate goal.

However, progress was painfully slow. I almost gave up because it felt like I was stuck in a cycle going nowhere. But once I began tracking my progress, I finally started noticing positive changes.

And you know what? That’s when things started to change.

I realised that the key lay in setting specific financial goals and diligently tracking them. This approach provided the motivation I needed to persevere and assured me that I was on the right path.

For instance, monitoring my debt payments gave me a clear picture of my progress, which was a significant turning point for me.

While my journey may not resonate with everyone, the importance of setting financial goals cannot be overstated.

Even if you don’t have an immediate desire to take control of your finances or pay off debt, setting any financial goal can make a big difference in the long run.

Setting specific goals helped me focus and achieve more than I ever thought possible. Although I still have a long way to go, my finances have improved significantly since I started this journey.

So, here’s the bottom line: set specific financial goals, work towards them, and keep track of your progress. It’s like having a roadmap to where you want to go and a surefire way to pave the path towards financial success.

And if you’re not convinced of the importance of setting financial goals, let me give you seven reasons why you start setting financial goals.

Before we dive into why it is important to set financial goals, let’s first explore the various types of financial goals. Essentially, there are two main categories you should be aware of:

Long-term Financial Goals

What are long term financial goals? These are the big dreams, like owning your own place, having a family, or retiring comfortably. Think of it as the long game.

Other examples of long-term financial goals include:

  • Saving up for retirement,
  • Paying off your mortgage, or
  • Setting aside money for your kid’s education.

These goals take time to achieve because they’re pretty hefty.

Short-term Financial Goals

What is a short-term financial goal? Now, these are the smaller goals you tackle along the way. They’re like stepping stones to your big dreams.

Maybe you want to get out of credit card debt, have a nice dinner out more often, or save up for a fun vacation.

Other examples of short-term financial goals include:

  • Paying off all your debts,
  • Building an emergency fund, or
  • Saving for a home upgrade,
  • Starting a business.

Short-term goals are quicker and easier to achieve.

Here’s the cool part: achieving short-term goals can actually help you reach those big, long-term dreams.

For instance, paying off your debts can free up money to save for a down payment on a house. Plus, they’re usually easier to tackle, so you get that satisfying feeling of accomplishment faster.

So, whether you’re aiming for the stars or just trying to get through the month, setting both short-term and long-term financial goals is key.

They’re like your roadmap to financial success!

Why it is Important to Set Financial Goals?

Without further ado, here are seven reasons why setting financial goals is super important and how they can pave the way to success.

Reason #1: You Need to Know Where You’re Going

First, let’s figure out where you want to go. Setting financial goals helps you define what success means to you and where you want to end up.

Once you’ve got that sorted, it’s like having a map to your destination.

You’ll know exactly what steps to take to get there, whether it’s buying a house, starting a business, or getting out of debt.

And when you have a clear goal in mind, making smart decisions becomes much simpler.

With an end goal to work towards making the right decisions become easier.Click To Tweet

Reason #2: Setting Financial Goals Determines How Much You Need To Save

Here’s another big reason why it is important to set financial goals: it tells you exactly how much you need to save to make those financial dreams a reality.

Ever wondered how much you need in your savings account or investments to reach your goals? Well, setting financial goals helps you put a number on it.

Whether it’s £5,000, £1,500,000, or even more, having a specific target lets you track your progress and adjust your savings plan as needed.

It takes the guesswork out of financial planning!

Struggling to save money? No worries! There are handy money-saving apps like Plum that can help you out.

With Plum, you can automate your savings without even noticing. It’s super easy to set up, and your savings can grow faster than you think.

By setting financial goals you are quantifying your ambitions — putting a number on them.Click To Tweet

Reason #3: Different Financial Goals Require Different Strategies

Another reason why setting financial goals is so important: different goals need different game plans.

If your goals are on the smaller side, like just saving up a bit more each month, a simple strategy might do the trick. But if you’re dreaming big – like buying a house, retiring early, or traveling the world – you’ll need to mix things up.

That could mean finding ways to make more money, cutting back on spending, or diving into investments like stocks to make your money grow faster.

Once you’ve nailed down your goals, you can figure out which strategies will help you get there. It’s all about finding the right approach for you.

Related: How to Set Powerful Goals You Can Achieve

Reason #4: It Helps Shape Your Career Choices

Another cool thing about setting financial goals: it can influence your career choices.

If you’ve got big goals, you might need to think hard about your career path. That could mean considering how much time off you can take, what you need to do to climb the ladder at work, or even starting your own business.

Sometimes, reaching your financial goals means taking a leap and leaving behind the safety of a regular 9 to 5 job and start your own business. It can be scary, but it might just pay off in the long run.

When you know what you’re aiming for financially, your career plans and your money plans can work together to help you get there. Cool, right?

Reason #5: Setting Financial Goals Helps You Stay Focused

Another big reason why setting financial goals is super important: it keeps you laser-focused.

Having clear financial goals helps you keep your eyes on the prize. Try snapping a picture of your dream – whether it’s a house, a car, or a job that lets you work from the beach – and sticking it up where you’ll see it every day, like by your desk.

When you’re tempted to splurge on something you don’t really need, seeing that reminder will help you stay strong. It’ll remind you why you’re putting in those extra hours and sticking to your budget.

In the end, all that hard work will pay off, and you’ll be well on your way to reaching your goals!

Reason #6: You Can Find the Right Tools to Help

Let’s talk about finding the right tools to help you out.

There are tons of tools out there designed to make saving, earning, and investing your money easier. Some of them you can get for free from the App Store or Google Play, while others might require a subscription or a one-time fee.

For instance, there’s the Wealthify app, which lets you start investing with just £1. Then there’s Plum, a nifty app that helps you save automatically.

And don’t forget about Cleo, which can help you keep track of your money.

When you’ve got clear financial goals, you can figure out which tools will be the most helpful for you.

That way, you’re not wasting money on stuff you don’t need. Save your cash for the things that’ll really make a difference!

Reason #7: Setting Financial Goals Creates a Sense of Achievement

Setting financial goals can give you that awesome feeling of accomplishment.

Sure, reaching your financial goals might take some time and effort. But the very first step – setting those goals – is a big deal. It shows that you’ve put thought and discipline into your financial future.

So, when you’ve written out your goals, give yourself a high-five! You’ve officially started your journey towards financial success, and that’s worth celebrating.

Setting your financial goals is the first step to realising them. Click To Tweet

Remember, you don’t have to go it alone. Asking for support can actually make it easier to achieve your goals. Maybe your friends, family, or even a coach can lend a hand and offer valuable advice along the way.

Check out our guide on how your friends and family can help you reach your financial goals together.

Need some guidance? Schedule a free coaching consultation to get started. Together, we can map out a plan to help you achieve your financial dreams.

Bottom line: Why is it important to set financial goals? Setting financial goals is the first step towards making them happen. And that’s something to be proud of!

Over to You

Do you have a financial goal? Write out a plan to help you get there. Research proves that writing down your goals significantly increases your chances of success.

If you need a little help getting started, look no further than the Financial Success Planner – your ultimate guide to setting, tracking and achieving your financial goals.


With our planner, you’ll create specific, actionable goals that keep you focused and motivated every step of the way.

But don’t just take our word for it – users love how the Financial Success Planner has transformed their money habits and helped them reach their goals faster than ever before.

If you’re ready to make your financial goals a priority and start seeing real results, then the Financial Success Planner is for you.

Don’t wait any longer – get your Financial Success Planner now and invest in your financial future today!

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  1. I think number 5 (staying focused) is critical. It’s not that hard to come up with a list of goals. That takes an afternoon. The hard part is having the daily discipline to work towards that goal, day in, day out. But like you say, there are many tools and apps that can make this easier, like automatic investment services.

    1. Thanks Miguel. There great tools and resources available to help us stay committed and focused on our goals. The first step is to set our financial goals which make it easier to find the right tools.

  2. If I’m honest I don’t set any financial goes, but I do look after my money. I like the idea of setting a goal and that feeling so positive when you achieve it 🙂

    1. Hi Helen, thank you for taking the time to leave your comments. I am very pleased to hear you are on top of your finances. Setting financial goals will help you focus on our short-term and long-terms goals so you can secure your financial future and build wealth.

  3. When I finished university I set a financial go to be debt free within 2 years after university. I was strict with myself and I managed it, now with new car, house and back for grad school I need to set the goals again and this post is a great reminder for me

  4. Funnily enough, my Husband and I have just put a date in our diary to sort out our finances, without distractions, when we are both free. I will add some of these ideas to our discussions!

  5. I definitely need to work on every of these. I am nof so good with managing money. I didn’t know about the tools, will look them up 🙂

  6. Great article, I am a firm believer that to achieve any goals you have to have a plan. No plan, no goals – stay stuck. # 7 builds confidence and empowerment, and creates an environment for future success.

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