It’s that time of the year again when people sit back, reflect, plan and make resolutions for improvement in different aspects of their lives – including finance. Improving your finances requires setting financial goals.

A financial goal is any money-related target. This target may be about earning (more) money, spending (less) money, saving, or investing. 

Financial goals may be short-term, mid-term, or long-term. Short-term goals are those achievable within a year; mid-term goals are achievable within 1-10 years while long-term goals are set to be achieved in more than 10 years, usually focused on retirement.



The primary purpose of setting financial goals is to achieve financial security. 

Don’t we all want that?

However, wanting financial security is not enough. You must plan and act accordingly for this want to be a reality. Hence, the need for financial goals. Financial goals are important for the following reasons:

  • Clear Vision

When you set financial goals, you have a clear vision of where you want to be financially at a point in your life. Financial goals also serve as a pathway to get to your financial destination.

  • Focus

Financial goals help you stay focused on your financial destination, especially in times of uncertainty. For example, with well-established financial goals, you will not be easily swayed with the crowd at steep rise and fall in prices.


Having explained why setting financial goals is important. Here are a few points to note when you set yours:

  • They should be personalized

Your needs and expectations are different from mine and those of your colleagues or friends. Hence, financial goals need to be personalized to meet your unique needs and expectations. Financial goals should also be set with consideration of your current financial situation.

  • They should be S.M.A.R.T

SMART is an acronym used to describe how effective goals are set.

S means Specific: You should state exactly what you want to achieve. E.g. earn more (not specific) will become earning a minimum of 10k from freelancing (specific).

M means Measurable: Set goals should have a means of assessing progress.

A means Achievable: Goals, however ambitious, must be realistic, considering available resources to achieve that goal. Rome wasn’t built in a day, so don’t expect to clear your debts of 100k in two months with your monthly income of 70k.

R means Relevant: Your financial goals should be important towards your overall financial well-being.

T means Timely: This implies that a time frame should be attached to each goal. Deadlines are one of our biggest motivations to act. E.g. purchase a Sony camera worth 10k in the next two months.

  • They should be easily accessible

Imagine taking your time and energy to set SMART goals that you forget, because they were far to reach or out of sight. Imagine such wasted effort: you wouldn’t like that and I don’t want that for you too. 

So, whether written or typed, your financial goals should be easily accessible for review. This way, the mind is constantly reminded of the goal to be focused on.

Building wealth/Financial security is a long-term deal. Therefore, be patient with yourself while learning from your setbacks or mistakes.