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Determining Your Financial Goals

A Roadmap for Every Stage of Life

Setting financial goals is one of the most important steps toward building long-term stability and peace of mind. Whether you're saving for something small or planning for retirement, having a clear plan helps you stay focused and motivated.

 

Types of Financial Goals

Most financial goals fall into one of three categories:

  1. Short-Term Goals (1 year or less)
    These are goals you can accomplish relatively quickly.
    • Examples:
      • Paying off a credit card
      • Building an emergency fund
      • Saving for a specific purchase
      • Making minor home repairs
      •  Establishing good credit
  2. Medium-Term Goals (1 to 5 years)
    These take a bit more planning and discipline.
    • Examples:
      • Saving for a down payment on a home
      • Paying off student loans or car loans
  3. Long-Term Goals (5 years or more)
    These are big-picture goals that shape your future.
    • Examples:
      • Planning for retirement
      • Saving for a child’s education
      • Building generational wealth

 

Defining Your Goals with the SMART Framework

To make your goals more achievable, use the SMART method:

SSpecific - who, what, when, where, and why
M Measurable - How will you know when you have achieved this goal? If there are many steps, how will you measure your progress?
A Attainable - This should not be discouraging; a goal should be motivating!
RRelevant - This should be a goal that fits you and your life, not the past or future version of you!
TTime-Bound - How long will it take you to achieve the goal or achieve relevant milestones?

Building an Emergency Fund

Before tackling medium or long-term goals, it’s important to have an emergency fund in place. This fund should be:

  • Liquid and stable (not invested in the stock market)
  • Stored in a savings account, money market account, or high-yield savings account
  • Used for unexpected expenses like car repairs, medical bills, or home emergencies
  • Replenished after use to maintain its safety net

General Guidelines:

  • If you’re single: aim for 3 months of essential expenses
  • If you’re married with one income, a single parent, or self-employed: aim for 6 months

 

Revisiting Your Goals

Financial goals aren’t set in stone. Life changes, and your goals may need to shift too. While medium and long-term goals tend to stay consistent, it’s helpful to revisit them regularly:

  • Remind yourself why you’re saving
  • Celebrate progress
  • Adjust timelines or priorities if needed

Staying connected to your goals makes it easier to stay on track and avoid setbacks.

 

 

Disclaimer
This page offers educational content and links to nonprofit and public service websites selected to support the financial wellbeing of COAERS members. These resources are provided for informational purposes only. COAERS does not endorse or guarantee the accuracy, security, or services of any external site. We encourage users to exercise discretion when accessing third-party content. Resources have been curated in accordance with COAERS’ Social Media policy and exclude for-profit entities, political organizations, labor groups, and individuals or organizations soliciting donations.