Dear Money Mentor: How do I set and track financial goals?

July 10, 2023

Start tackling those short-, mid-, and long-term goals with these seven steps.


Dear Money Mentor is designed to answer common consumer banking questions and offer guidance to improve financial wellbeing. Read on for tips and expert advice from Nancy Smock, branch manager, and Anthony Marengo, branch assistant manager.

When it comes to money, everyone has their own list of financial goals and ideas for how to achieve them. But whether success means saving for a trip or saving for retirement, there’s one thing everyone has in common. We all must start somewhere. Let’s break down tactics for setting your own goals, as well as monitoring your progress and course-correcting after a setback.


1. Evaluate what’s important to you

No two people are the same, and neither are their financial journeys and situations. To set your goals, start by asking yourself the following questions:

  • What is my ideal lifestyle?
  • Do I want to forego a mortgage for a couple of years to travel the world?
  • Do I want to retire in my 40s or 60s?
  • Do I want a big wedding or an intimate affair?

Your answers will prep you to better define your financial goals.


2. Set multiple financial goals

Money milestones vary from person to person. Generally, financial goals fit into three categories: short-, mid-, and long-term.

Short-term financial goals satisfy more immediate needs and wants. For example, creating an emergency fund in case you lose your job, paying off debt or saving for a trip to Europe.

Mid- and long-term financial goals might be bigger life events. Some examples include saving for a new house, remodeling the basement or putting money aside for a child’s college tuition. Saving for retirement is a big long-term goal for many people. But perhaps you have other ideas in mind as well, such as establishing a trust fund for beneficiaries.

Financial goals are a personal decision, and there is no one-size-fits-all approach.


3. Track your income and expenses

Before you’re able to determine what you can save every month, start tracking. You need to examine how much money you’re making compared to what you’re spending. Whether it’s a spreadsheet, your bank’s website or third-party app, find a tracker that works for you. Make note of every dollar that comes into and leaves your bank accounts.

Pro tip: Set up multiple savings accounts to better visualize your progress toward each of your goals.


4. Start small

Many people have an all or nothing mentality when it comes to saving and set lofty financial goals. While well-intentioned, it’s not realistic to maintain. Once you know how much you’re bringing in every month and the amount needed to pay bills, it’s time for a decision.

Pick a percentage you know you can save and stick to it. Start with 5 percent, working your way up to 8 or 10 percent as your budget allows.


5. Invest in yourself

Every time you get a paycheck, pay yourself first. Before designating money for bills, groceries and other expenses, first deposit the amount determined above into a 401(k), IRA, or another type of savings account. Better yet, talk to a banker about setting up an automatic transfer. That way, it becomes a task you don’t even have to think about.


6. Schedule check-ins

Ready to set and track your own financial goals? Get started by downloading this worksheet.

At least once a month, review your income, spending, debt and savings to evaluate the progress on your goals.

Are you hitting your targets? If not, look through your transactions for clues on how you could improve. Do you need to buy that $5 coffee every day, or could that money be reallocated to your savings account? Can you hold off on purchasing a new phone until you’ve saved up the money?

Referring back to your short-, mid-, and long-term financial goals frequently can help keep you in check.


7. Be flexible

Life happens. From your car breaking down to an emergency trip to the vet, unexpected expenses are bound to crop up. In fact, you should plan on it. While frustrating, it’s important to not let these events derail your progress.

If necessary, temporarily decrease the amount you’re saving with a deadline to get back on track. For example, if you’re setting aside $50 every paycheck for short-term financial goals, cut back to $25 per paycheck. And then plan to increase that number to $50 again in six months.


Ready to set and track your own financial goals? Get started by downloading this worksheet.

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