Even though the cost of living is rising, you can still build a solid financial plan to fund your dream lifestyle. There are plenty of proven benefits to creating financial goals, including giving you a sense of purpose and the ability to measure your progress.
Financial goals for different life stages
The life situation you are in should have some influence on the goals you set for yourself. Let’s take a look at examples of goals you could have, based on two different scenarios. Keep in mind that setting goals that are SMART (short for specific, measurable, attainable, relevant and time-bound) will ensure that they are realistic and achievable.
Setting financial goals while you’re in school
Dedicating several years to being a student, when you learn the skills and knowledge needed to launch your career, is a big commitment. Countless hours go into obtaining a degree or certificate with the ultimate goal of landing a job that will help you make a living. Between tuition and textbooks, housing costs and making time for rest and relaxation, it’s also a period that comes with a lot of costs. Here are a few sample SMART goals that can make this expense feel more manageable. Note for each what is specific, measurable, attainable, relevant and time-bound.
- Pay off tuition and textbooks by working part-time and saving $750 within six months.
- Save $100 per month to buy a new laptop within 10 months.
- Allocate $250 in your monthly budget in order to buy new clothes.
- Research and find the best student cell phone plan during back-to-school promotions.
- Reward yourself with a graduation trip by saving $1,500 in one year.
Setting financial goals after you start your first job
As a young adult, landing your first full-time job is a significant milestone. It gives you the opportunity to become more independent. But it’s not uncommon to have a starting salary that’s on the lower end of the industry pay scale. With that in mind, here are examples of financial goals that can start you off on the right foot. Of course, your own SMART goals should be based on what you want to achieve. Again, see how each one is specific, measurable, attainable, relevant and time-bound.
- Pay off $275 from your student loan balance every month for the next 12 months.
- Set aside $50 per month to build an emergency savings fund.
- Save $125 per month to put toward a car or toward rent on a future apartment.
- Research and apply for the best cash back credit card before the end of the month.
- Contribute $100 every month to buy index funds in a tax-free savings account (TFSA).
How to achieve your goals
It’s not easy to find a balance between paying off debt, saving for a rainy day and investing for the future. It often comes down to prioritizing your goals and assessing your progress on a regular basis. Here are a few ways to make that process more manageable.
1. Open multiple savings accounts
One of the easiest ways to keep track of your various goals is to set up separate savings accounts—one for each goal. Instead of grouping all your savings into one account, splitting them up makes it easier to see the different goals you are working towards and the progress you’re making.
You can label each account with a “nickname” that reflects the item you are saving for, the end-goal amount and the date by which you want to have saved it. Here’s what that might look like when you log into your online bank account.
|Account nickname||Account balance|
|Emergency fund: $2,000 (Jan. 15)||$450|
|Car deposit: $5,000 (June 1)||$2,500|
|Summer European trip: $1,500 (March 31)||$975|
2. Automate your savings
If your employer pays you on a consistent schedule (for example, bi-weekly), you can set up an automated transfer in the desired amount from your chequing account to the various savings accounts. This “set it and forget it” method eliminates the manual process of remembering to do this yourself. It also helps you to prioritize your financial goals over other unexpected expenses that may arise and keep you from sticking to your plan.