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Ask Yourself This Question When Setting Financial Goals

setting financial goalsAs a regular saver and investor, you’re probably saving for something in particular. Perhaps you’re saving for a relaxing summer vacation. Perhaps you’re aiming to max out your Roth IRA this year like me. Perhaps you’re saving for a house, or even for financial independence. Most of us find it easier to save when we’re tucking money away for a specific purpose and setting financial goals.

But whatever the goal is, there’s usually more meaning behind the money goal than the specific numbers. What does that money mean to you? Have you been setting financial goals?

Perhaps your first answer was a general concept – something like freedom. That’s a start, but what do you plan to do that freedom? One person might want to leave her community behind to see the world, and the other might want more time to spend with her family. Those are two very different desires.

As Carl Richards wrote in his recent book The One Page Financial Plan, the why behind the money goal might feel tough to figure out, but it’s the number one question to ask yourself when setting financial goals. A doctor asks lots of good questions before making a diagnosis. By the same token, why would you be setting financial goals without doing a little bit of questioning yourself?

setting financial goalsGetting to the Why Creates More Options

Like many people, my husband and I have set many financial goals without getting clear about what we really want our money to do for us. When we first started making decent money after college, we started saving for retirement. We wanted to be responsible, savvy adults, but we didn’t probe any further. Then, when I stumbled across the idea of early retirement and we really ramped up our savings. It sounded like a fun goal, and the idea of leaving boring jobs for “freedom” sounded wonderful.

We saved for over a year before we really started to dig into what freedom really meant to us. For us, our top two priorities are interesting work, and time with each other and our future children. Once we got clear about what we really wanted, we were able to create new solutions to bring us closer to our deepest wants even quicker.

It turns out that we don’t need to get to financial independence to meet those needs. We can get the vast majority of what we really want now by working interesting, well-paid, flexible jobs. The answer was to get a different job, not to stay in the same profession and save for ten more years. We still want to be financially independent as that will give us even more freedom, but it will come in time.

setting financial goalsYou Might Be Delaying Your Happiness – Now and Later

I’m not the only one who’s fallen into the trap of pursuing a goal at the exclusion of everything else. The Mad FIentist recently wrote a great article called Happiness Through Subtraction, where he talked about how he ignored his unhappiness with living in a rural, isolated area in the pursuit of financial independence. Thankfully, his journey to financial independence was pretty quick, and he’s since found a place to live where he’s much happier.

But what if the journey took 5 or 10 or more years? Why put off your deepest wants and dreams in the pursuit of a financial number? If you get clear on what you want, you can probably find a way to make it happen sooner, and reach your financial targets over time as well. Delayed gratification is only worth it if it is necessary to accomplish your goals.

How to Go About Setting Financial Goals for Yourself

We’ve established that understanding the why behind your money goal is important.  So how do you go about finding your why, and where do you go from there?

Spend some time thinking about what you really want to use your money for. Ask yourself: “What does money mean to me?” Write it down on paper so you have everything in front of you often. Then spend time thinking of how you can move towards bringing more of what you want into your life. Can you do it sooner rather than later? Create new goals, and then take action to make them happen.

Are you setting financial goals to get you the life you really want?

Battle of the Mind Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. I think financial independence for many means having the ultimate freedom and flexibility with one’s job. I think it’s so important to remember life is about the journey not the destination. In addition to setting financial goals for the year, I also set family and social goals.

    • As a very goal oriented person, I always try to remember that life is the journey, not just the goal. It’s awesome that you set financial/family/social goals!

  2. Agree with the fact that we should always know why we want something (in this case financial independence). By knowing this,we have a purpose and that gives us extra strength and extra will to work even harder to reach our goals. And financial independence is something I am sure almost everyone would want to achieve as it gives you breathing space and lets so you enjoy life to the fullest.

    • I find the same. Knowing the why helps me work harder to meet my goals, in part because there’s less internal conflict so I can just go for them.

  3. Awesome thoughts. Setting your financial goals (whether short or long term) should put you in charge of your money and your life.

    • Thanks Bill! I’m glad you agree.

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