Set your Financial goals
Tips for setting specific and realistic financial goals.
once you’ve gathered the information you need to get started, you can complete step 1 – setting your financial goals. Also, think about when you hope to achieve each goal.
6 examples of specific goals
Be specific and realistic
The strongest financial goals are specific and measurable. Instead of saying you want to have enough money to retire comfortably, think about how much money you’ll need. Maybe your specific goal will be to save $500,000 by the time you’re 65.
Your goals should also be realistic and based on your current financial situation. Think about how much you can afford to save toward your goals each month. Based on how much you can afford to save, you may have to decide which goals are most important to you.
6 questions to ask
Paying off debt and starting to save: Erika’s story
At age 28, Erika has four main goals:
Erika's plan: When Erika met with her financial planner, he developed a plan to help her achieve these goals and more. The plan included these main steps:
Following this plan, Erika was debt free by the time she turned 30. She had some retirement savings as well. Then, instead of paying back loans, she started to save toward her next goal: buying a house. It took her three more years - to age 33 - but she was able to buy a nice condo in an area she really loved.
6 examples of specific goals
- Pay off your credit card debt within the next 6 months.
- Save $5,000 for a vacation next year.
- Pay off your mortgage faster by paying down an extra $5,000 each year.
- Save $20,000 for an emergency fund within the next 2 years.
- Save $25,000 for a down payment on a house over the next 3 years.
- Save $40,000 for your child's education by the time she turns 18.
Be specific and realistic
The strongest financial goals are specific and measurable. Instead of saying you want to have enough money to retire comfortably, think about how much money you’ll need. Maybe your specific goal will be to save $500,000 by the time you’re 65.
Your goals should also be realistic and based on your current financial situation. Think about how much you can afford to save toward your goals each month. Based on how much you can afford to save, you may have to decide which goals are most important to you.
6 questions to ask
- What are your top financial goals?
- When do you want to reach each goal?
- How much money will it take to reach each goal?
- How much can you afford to save toward each goal?
- What will you gain or lose by putting 1 of your goals first?
- What choices will help you enjoy a better quality of life today? In the future?
Paying off debt and starting to save: Erika’s story
At age 28, Erika has four main goals:
- She wants to pay off her remaining student loans by the time she was age 30. She owes $24,000.
- She wants very much to buy a home, but doesn't know how she can save for that goal while she still has debt. She also doesn't know how much house she can really afford to buy.
- She wants to reduce her income taxes.
- Start saving for retirement.
Erika's plan: When Erika met with her financial planner, he developed a plan to help her achieve these goals and more. The plan included these main steps:
- Continue to pay the minimum amount each month to pay back her student loans.
- Open a Registered Retirement Savings Plan (RRSP). Save the maximum she can each year.
- Use her tax refund from her RRSP contribution to pay off her student loans faster.
Following this plan, Erika was debt free by the time she turned 30. She had some retirement savings as well. Then, instead of paying back loans, she started to save toward her next goal: buying a house. It took her three more years - to age 33 - but she was able to buy a nice condo in an area she really loved.