Most people have experience with saving for a financial goal, whether it's a nice shirt or a down payment on a car. Fewer people, though, have actually taken the time to set out a specific financial goal. 

That's understandable, since planning out your goals and making them specific, time-bound and measurable, can be a bit intimidating. However, setting financial goals won't just make you more likely to achieve them--it will also improve almost every aspect of your life. 

Why is it Important to Set Financial Goals?

Financial Goals Give you Direction

Almost everyone would like to improve their lives in some way. A lot of people, though, don’t know exactly how or what they would like to improve. If you’re unhappy with where you’re living, for instance, you’ll need to know what you’d like to improve to be happy, like buying a new house—as well as how much that improvement will cost.

This is where setting financial goals comes in. When you set a financial goal, you’re giving yourself, and your money, a purpose. This will help you prioritize your expenses and set financial habits that will help you reach your goal. It also helps you think about what you ultimately want out of life and prevent you from drifting aimlessly (unless that’s exactly what you want).

Want more help prioritizing your expenses? Make a budget!

Financial Goals Help you Stay Focused

In addition to giving you direction, financial goals also help keep you to keep focused. If you haven’t taken the time to clearly set out your financial goals, you’re more likely to spend money on things that seem nice at the time, but ultimately don’t help you reach your goals.

Once you have a financial goal clearly set in your mind, though, you’re less likely to splurge on something cool that catches your eye. In addition, if you have the opportunity to make more money, such as taking on a side hustle or working an additional shift, you’ll be able to balance the thought of having to do extra work against the thought of how you’ll use the extra money to help achieve your financial goal. This can give you that extra incentive to put in just a bit more work to help get you that much closer to your goals.

Financial Goals Keep you Accountable

Setting financial goals doesn’t just keep you focused, it also keeps you accountable. When you put together a plan to reach a financial goal, you’re giving yourself a roadmap and setting an expectation for yourself that you’ll hit each step of the way to your goal when you say you’ll reach it. This creates a sense of ownership for the goal, as well as a sense of responsibility to hit each benchmark when you say you’re going to hit it.

This doesn’t mean that you’ll never miss one of your benchmarks, though. When you do miss a benchmark, though, you’ll be less inclined to walk away from your plan and instead try to figure out what went wrong, how you can put it right and even what you can do to get back on track to meeting your goal.

Financial Goals Motivate You

It’s easy to lose motivation when saving for a financial goal. You might get tired of taking money out of your paycheck that you’d prefer to spend on something more immediate and fun, or you could just get tired of saving for months on end with the goal still far in the future.

Having a clear financial plan, though, can keep you motivated. You’ll have a clearer picture of your financial goal to work toward instead of just some vague notion, which will make you less likely to get distracted. If you’re saving for a new car, for instance, the image of you driving in that car down the freeway can do a lot to deter you from spending money on other things.

A plan for a financial goal also typically has benchmarks. Examples of these benchmarks can be:

• Reaching a certain amount, like $500 or $1000
• Meeting your savings goal every month
• Being able to afford part of a larger goal, like an appliance if you’re remodeling a kitchen

Reaching these benchmarks can give your motivation a boost and keep you on track to reach your goal.

Financial Goals Make you Feel Accomplished

Many financial goals are not easy to achieve. They require discipline, patience, and at least a little bit of sacrifice. When you finally reach your financial goal, though, all that effort seems worthwhile. Even reaching a minor financial goal can give you a huge sense of accomplishment.

Even better, that feeling of accomplishing what you set out to do is empowering. You’ll start believing in yourself more and feel more confident about setting other financial goals. You might even be more comfortable trying new tactics to reach your financial goal, like opening a money market account or taking out a line of credit.

Got questions about how to save for financial goals? Ask us!

Set Financial Goals With First Alliance Credit Union

Setting financial goals can play an important role in your financial success. They can give you a sense of direction and keep your focus on the things that really matter to you, and they can also help keep you motivated while you’re saving. Once you do reach your goal, the sense of accomplishment you feel can empower you to set more goals, be more ambitious and explore ways to reach your goals you might not have previously considered.

If you’d like help setting and working toward your financial goals, become a member of First Alliance Credit Union today. Our member advisors will help you figure out how to save for a goal, and you can put the money you’ve saved towards your goal in a traditional savings account, certificate of deposit or even a WINcentive savings account.