What Do I Do If I Am Unclear About My Financial Goals

MatchupAccess
Jun 16
4 min read

Setting, Reaching, & Exceeding Your Financial Goals

Without clear goals it can be difficult to chart a path towards financial freedom. Financial goal-setting provides a road map that guides you towards achieving a desired financial outcome, whether it’s reducing debt, achieving a comfortable retirement, or owning your dream home.

In this article, we discuss the importance of financial goals, as well as the tools and professional support you need to create SMART goals.

Why Financial Goals Are Important

Financial goals provide an effective way to spend and save money, both at a personal and professional level. The right financial goals can help you improve your lifestyle, manage debt, and achieve an enjoyable retirement. [1]

The Role of Clear Goals in Financial Success

Financial goals are more than just ambitious dreams. Setting goals gives structure to those dreams and provides a realistic path to actualizing them. Clear goals, whether short term or long term, provide the motivation and sense of direction you need to turn dreams of financial success into reality, one step at a time. [2]

How Undefined Goals Can Impact Your Finances

If you don’t have a specific goal in mind, you can easily lose sight of the important things to spend your money on. You’re also likely to spend more than you can afford, and find yourself in a situation where you can’t meet unexpected bills or contribute towards your retirement plan. Worse still, you could get into a vicious cycle of debt, and end up being unable to take care of crucial expenses like insurance or your medical cover. [3]

Signs You Might Be Unclear About Your Financial Goals

Financial planning can be unexciting, complicated and time consuming to a lot of people. As a result, few people take time to set out their financial goals. Statistics show that only 36% of Americans have a written financial plan.

Difficulty Prioritizing Financial Decisions

Rather than using rational analysis, many people make financial decisions based on emotions leading to poor outcomes. Difficulty in prioritizing financial decisions can be seen in habits like impulsive buying, or letting biases and fear of missing out influence your investment decisions. [4]

Feeling Overwhelmed by Long-Term Planning

When several needs compete for your attention, such as vacations, home remodeling, and education savings, it can feel overwhelming to the point that you’re unable to prioritize your long-term financial goals.

Lack of Motivation to Save or Invest

Saving money can give you financial independence and peace of mind by providing a financial cushion. However, statistics show that only 3 in 10 people have some savings in the US, and that 27% of US adults have no emergency savings at all. [5]

Common reasons include:

Lack of financial literacy
Low income perception
Limited time to research investments
General stress and burnout

Steps to Clarify Your Financial Goals

Attaching reasons to your financial goals helps put them in perspective and fuels the motivation to act on them.

Assessing Your Current Financial Situation

Examine your income, expenditure, assets, and liabilities to find your net worth and identify improvement areas. A financial assessment is most effective annually or after life events. Gather financial documents such as bank statements before starting. [6]

Identifying Short-Term vs. Long-Term Goals

Short-term goals: <1 year (e.g., wedding, vacation)
Medium-term goals: 1-5 years (e.g., buy a car)
Long-term goals: >5 years (e.g., mortgage payoff)

Short-term savings may go into high-yield accounts; long-term goals into investments. [7]

Understanding Your Values and Priorities

Understanding your financial values allows you to make decisions that align with your priorities.

Use the 50/30/20 rule:

50% needs
30% wants
20% savings [8]

Tools and Resources to Help Define Financial Goals

Budgeting Apps and Goal-Setting Tools

Budgeting apps offer:

Account syncing
Real-time spending tracking
Alerts for overspending
Credit score monitoring

Examples: Mint, YNAB (You Need A Budget)

Working with a Financial Advisor or Money Coach

Money Coaches: Help with budgeting and mindset; charge hourly or by package [9]
Financial Advisors: Cater to high-wealth clients; manage investments and charge based on assets

The Role of Self-Reflection in Financial Planning

Asking Key Questions About Your Future

"Where do you see yourself financially in 5-10 years?" Ask:

Am I saving for retirement?
Do I have an emergency fund?
Am I investing?

How Lifestyle Choices Influence Financial Goals

Your lifestyle impacts your ability to save. Impulse spenders struggle to meet goals. Those aligned with long-term savings habits are better positioned for success. [10]

How to Set Achievable Financial Goals

Using the SMART Goal Framework

SMART = Specific, Measurable, Achievable, Relevant, Time-bound [11]

Specific: Target a clear financial issue
Measurable: Track progress
Achievable: Stay realistic
Relevant: Align with broader life plans
Time-bound: Define deadlines

Breaking Larger Goals into Manageable Steps

Define your main goal
Set milestones
Break milestones into tasks
Assign deadlines
Track and adjust progress

When to Seek Professional Guidance

How Financial Therapists Can Help with Goal-Setting

A financial therapist addresses emotional blocks around money like stress, compulsive spending, and avoidance. They help clients develop healthy financial behaviors and self-awareness. [12]

Benefits of Working with a Certified Financial Planner

A CFP helps you:

Create SMART financial goals
Stay accountable
Manage risk
Optimize investments
Stay compliant with laws

Staying on Track Once Goals Are Defined

Creating a System for Regular Progress Reviews

Benefits of annual financial reviews:

Stay on track
Manage risk
Maximize returns
Support smart decision-making

Use key ratios:

Solvency Ratio
Liquidity Ratio
Savings Ratio
Debt Service Ratio

Adjusting Goals as Life Circumstances Change

Change your budget if your situation changes:

Job loss: Reduce wants, build emergency funds
Promotion: Save or invest new income, pay off debt [13]