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4 Steps To Plan For & Reach Your Personal Finance Goals

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Reaching your personal finance goals is easy if you have clarity on what you want, and where you currently stand.

We want that money freedom, so that we stress less about having and keeping money, and enjoy life a bit easier. There’s still gonna be problems, but you’ll have money to solve some of those problems.

This post was meant to give you insight into how I personally plan for money goals, set them, and how I stay on the tracks to achieve them over time.

I learn best by seeing personal “over the shoulder” methods of others, and I hope that by doing this myself, you get some aha moments.

So whether you’re starting off fresh or have already been well on your personal finance journey for a few years now, this post might have something for you.

Please share with anyone you think might benefit greatly from starting their own personal finance journey, by making plans to save.

Step 1 – Put the money goals on paper

Brainstorming my personal finance goals

I do best by putting my thoughts to paper, and for some reason I never use a pencil. I love the dark ink, and don’t care if I make a mistake.

I’ll take out a clean sheet of paper, put my iPhone timer on for something like 30 minutes, and just start brain dumping all my goals and thoughts on paper.

This isn’t a journal entry, I’ll create boxes for different goals, set my ideal end number, and leave space to break down the goals.

In a recent session, I was re-reviewing my goals, and had boxes for..

  • Saving for a new house
  • Savings towards emergency fund
  • Monthly investing into ROTH IRA for both me and my wife
  • And what I would do with any extra money if it was there that month

The best part is, sometimes I keep this piece of paper as a reference. But most times, I will redo this exercise in a month or two, and have an even better plan.

Your mind works wonders when you focus on something over time, give you more and more clarity and confidence that you can do things.

That’s why it’s important that you start now and know where you stand with the money you have (income & savings), and the money that’s going out the door (bills and debt).

I created a personal finance document on Google Sheets that you can make a copy of on your own account to start managing and reviewing your personal finance growth over time.

Step 2 – Figure out what you can allocate towards savings and investing monthly

Money envelope

After you have spent some time thinking about where I’d like to be with my personal finance goals, I now have to figure out how to take our family income and allocate money towards our savings & investing goals.

First you set the vision in step 1.

Now you figure out how to make it happen in step 2.

One of my goals was to build up my emergency fund. It’s actually been fine for some time, we had about 5-6 months of expenses saved in our high interest savings account.

After some time, I decided that I wanted to build this up to a one year emergency fund. An amazing feat for me.

I’d be stress free for sure when we get to that goal, but I started small when I first set this goal, one month at a time.

Taking my examples above, let’s put some hypothetical numbers towards each, so you can follow my examples.

  • Saving for a new house – $15,000 (for the down payment)
  • Savings towards emergency fund $36,000 (for one years of monthly expenses)
  • Monthly investing into ROTH IRA for both me and my wife $11,000 (to max out both yearly contribution limits)

Now that there are numbers for each of my goals, I need to figure out what our family income can put towards these goals.

Say we make $6,000 a month, and out of that we can put aside $1,500 each month for these goals.

Now I can go back and prioritize the above 3 goals to see if one needs to get achieved quicker than others, or if all 3 can just get a 3-way split.

For this example, we’re just gonna say that all 3 goals are equal.

Step 3 – Work backwards to create a timeline for your goals

For each of the 3 goals I set, I now have a goal for each with a dollar number, and now I know how much I can put towards these 3 goals every month.

Now I can figure out how long each goal should take before being completed, so that I can maybe share this with my wife and/or just have it to review on a monthly basis to motivate me and keep me accountable.

For the “Saving for a new house” goal, I had a goal of $15,000 for the down payment with no set deadline. I’d just like to have this money ready whenever we buy a house in maybe 4-5 years.

If I put away a third of the monthly $1,500 budget towards this goal, I will reach the end in 2 years and 6 months.

My next goal was the “Savings towards emergency fund” goal with the dollar value of $36,000. This was for one years of monthly expenses, and I mentioned that I already had 5 months saved.

So I need to keep saving $500 towards this goal, and I will get there in 3 years and 6 months.

I’ll skip the ROTH IRA example as I’m sure you see how simple I am making this.

Step 4 – Get to work, and automate this if you’re forgetful

This is the hard part. Making it routine.

This is the key to reaching and surpassing any of your personal finance goals.

You start small and get stronger over time, and eventually build up solid wealth. You have to start now, and keep going every month if you want to see great results by next year this time.

One of my personal finance mentors Ramit Sethi always says that you should automate your savings and investing goals if you can.

I personally find it extremely rewarding to manually deposit funds into my savings accounts for each of my goals every single month, so I stick to that plan, and have so for some years now.

There’s no trick to this, you just have to make it a habit.

To give you some insight, I set a goal to review my personal finance every 15th of the month.

On Google Drive, I have a checklist with my goals that I mentioned earlier. Each month I have to say yes (and highlight that box green) or no (and highlight the box red) if I was able to put money towards that goal.

Every month, I make it a game to get money and put it towards each of my savings and investing goals before the 15th hits, so I can make sure all my boxes are green.

I made it a game.

Make plans and take action on reaching your personal finance goals today

It’s really that simple to start planning for and eventually achieving your personal finance goals.

I laid out an example of how I would go from start to end so that you can have an example of how simple it really is.

After reading this, I hope you’re able to get started on your personal finance goals or find a good takeaway to improve your current goal setting process.