Personal Finance 101: Setting Your First Financial Goals
June 30, 2021 | June Mckaig
Understanding your personal finances can be difficult when you’re just starting out. How do you set goals for things that may not happen for weeks, months, or years? What do you do with seemingly impossibly low income? What is a good financial goal?
Let’s clear this up. Consider this personal finance 101, and your first lesson? Understanding and achieving your first financial goals.
What To Consider When Setting Your First Financial Goals
When setting your first financial goals, it can be helpful to have a framework to base them on. The most common is a timeline. If you separate your goals out by how long they’ll take, you can more easily control where your priorities should lie.
Short-Term Financial Goals
Short-term goals are the ones that you can achieve relatively easily. They’re readily done in the first few days or weeks. Short-term goals can help you feel accomplished and keep you on track by feeding into the part of your brain that loves instant gratification.
This is why short-term goals are a part of our personal finance 101. Short-term goals might include things like:
- Creating a budget plan;
- Setting an emergency fund goal;
- Paying off lingering small credit card bills.
Mid-Term Financial Goals
Mid-term goals are the ones that take longer than a few weeks, but no more than a couple of years. They’re goals that have long timelines but that you can see a marked improvement on year-to-year or even month-to-month. Mid-term goals help you know what the next step is and can be adjusted to match your progress.
And just like short-term goals are a big part of personal finance 101, mid-term goals are just as important. Mid-term goals might include:
- Finding appropriate insurance coverage;
- Paying off major debts;
- Making major purchases like homes or cars.
Long-Term Financial Goals
Long-term goals are the ones that take many years or even a lifetime. They may seem like lofty dreams to young adults, but establishing them early is essential. The longer you have to save, the more realistic they become.
And, again, just like the first two goals, these long-term goals are an important part of personal finance 101. Long-term goals include:
- Planning for your retirement;
- Saving for your child’s education;
- Making and seeing the benefits of major investments.
How To Set Your First Financial Goals
Knowing where your financial goals fit is the first step. Now it’s time to begin working toward them. Gather your financial documents, sit down with a professional and anyone else included in your goals, and make a plan.
The SMART Strategy
The most popular, and efficient, strategy for setting your first financial goals is the SMART strategy. It is definitely a strategy that needs to be in personal finance 101. This method, originally developed in the 1980s, focuses on breaking your goals down to make them more motivating and keep you engaged for the duration of the goal.
SMART goals stand for the following:
- Specific. Your goal is about one thing and one thing only, to keep you focused.
- Measurable. There are tangible benchmarks you can hit with this goal that let you measure progress.
- Achievable. This is a goal that, if well-planned, can be reached without a serious struggle.
- Realistic. What you want isn’t exaggerated or grand. It’s simple and clear.
- Time-bound. There is a specific timeline to follow to achieve this goal.
An example of a SMART goal might be setting your savings goal for the year. Instead of saying, “I want to save money,” which is a very broad statement, you might say, “I want to save $1000 in this account in one year.” Here’s how to fit that statement in each SMART category.
- Specific – “I want to save $1000 in this particular account.”
- Measurable – “I will regularly check my bank statement and make timed deposits.”
- Achievable – “It takes one monthly deposit of at least $84 to save $1000 in a year.”
- Realistic – “My income is such that I regularly have at least $100 left at the end of the month.”
- Time-bound – “I will achieve this goal in one year.”
The wonderful thing about the SMART system is that it allows for quick and easy troubleshooting of a hard-to-stick-to goal. You can see where you’re losing motivation by checking off the five requirements as you go. It’s the reason this system should be in your personal finance 101.
How Car Title Loans Can Help With Your First Financial Goals
If you have a goal in mind that is being held back by emergency expenses, one way of getting rid of those expenses might be car title loans.
Car title loans are short-term loans that use your vehicle’s title as collateral for the loan. This loan can help you get through those emergencies you cannot handle alone. The good thing is you can apply even if you have poor or nonexistent credit. Also, you don’t have to give up your vehicle while you are repaying the loan.
If you’re at least 18 years old and own your own car, truck, or van, then you could be sitting on up to $15,000 in car title loans that can help you handle your emergencies.
How To Get Car Title Loans In Arizona
Getting car title loans is simple in Arizona. Southwest Title Loans is excited to help you meet your goals and handle your emergency expenses with this quick and easy car title loans process. Applying with Southwest Title Loans even starts right online.
All you need is your license or state-issued ID, lien-free vehicle title, and the vehicle. You can fill out the online form and wait for the nearest car title loans location to give you a call back. This should only take a few minutes, so be next to your phone.
When you are finished with the call, you can head to the meeting the representative will set up with the items. They will assess your items and inspect your vehicle to determine how much you could get. They will then determine if you qualify for approval.
If you do get approved, we will help you finish the paperwork and explain the loan terms. Once everything is signed and agreed with, you will get your cash right then.
Achieving Your First Financial Goals
Personal finance 101 doesn’t have to be scary. As long as you know what your goals are and where they fit in your timeline, you can be ready for anything that life throws at you. Understanding how to put those goals together is as simple as being SMART. Consider yourself a personal finance 101 graduate.