Financial Freedom Awaits: Setting and Achieving Your Long-Term Goals

What does financial freedom mean to you? Is it paying off credit card and loan debt? Saving for a house? Being well prepared for retirement? Improving your credit score?

Financial freedom means something different to everyone, but there’s one common thread through all long-term financial goals: being financially secure. Let’s take a look at how you can achieve this and your other goals.

Defining Financial Freedom and Setting Your Goals

First, define what financial freedom and security means to you. We gave some examples above — paying off debts, saving for a house or retirement, working on your credit score — but you don’t need to stick to those goals. The definition of financial freedom is unique to you.

Defining what financial freedom means to you helps you determine what your long-term financial goals are. It can be a bit overwhelming to think so far ahead in the future, but it gives you the chance to work through potential problems and best prepare for them. 

Now, some good news: Your long-term financial goals don’t have to be set in stone. They can evolve as you do.

Get SMART To Achieve Your Long-Term Financial Goals

Goals can be tricky. It feels great when you achieve them, but sometimes, you feel like you’re not getting anywhere. It could be that the goal may not have been fully achievable with your available resources. Or maybe your goal wasn’t specific enough. Either way, now, you may not feel so great about the goals you set and your ability to achieve them. Let’s explore how to get around that.

Having clarity when you’re setting your long-term financial goals can help provide the motivation and focus you need to be successful. You can do this by setting SMART goals, which are beneficial in guiding the goal-setting process and ensuring your goals are reachable. 

Each goal should be:

• Specific: What is the goal you want to achieve? Make it as specific as possible so that success is more definable. For example, “Save money for a house” is a broad goal. Determining the exact amount you want to save is more specific and an indicator of when you can move to the next step.
• Measurable: How will you know when you’ve met your goal? This is where being specific comes in handy. 
• Achievable: Do you have the skills and resources necessary to achieve your goal?
• Relevant/Realistic: Is your goal meaningful and possible to achieve? For example, improving your credit score is doable, but improving your credit score by hundreds of points in a week is not.
• Time-bound: Every goal should have a timeline attached to it. Specify when you should complete the goal and any benchmarks to meet along the way.

How To Overcome Challenges

Unfortunately, you may encounter some hurdles on the way to achieving your goals. We’ve got some tips to help you overcome them.

Establish your budget.

If you haven’t already, it’s time to take a look at your budget and periodically revisit it as your finances change. Determine how much you can commit to your goals each month, and make sure it’s not too aggressive so that you aren’t stretched thin to afford other necessities. 

Make sure your checking account works for your lifestyle.

Your checking account is an essential component of tracking your spending and making sure your money is working for you. This may be a good time to evaluate if you’re getting everything you need from your checking account. For example, monthly and ATM fees can add up and prevent you from putting money toward your goals. 

Set up a savings account.

A savings account is an essential tool for putting money away into an emergency fund or for saving for long-term goals while removing some of the temptation to spend it. While you can still transfer money back and forth between your accounts, it’s largely going to be “out of sight, out of mind,” enabling you to more easily put money toward your goals.

Invest.

Investing in financial products such as certificates can help ensure that you’re saving money toward your goals while eliminating the temptation to use the funds. With certificates, you’ll deposit a lump sum of money into the account, and it will accrue interest for as long as it’s in the account, helping you reach your goals quicker. 

However, you agree to not withdraw from the account for a specific amount of time. If needed and for a fee, you can withdraw the money if you really need it, but make sure it’s a true emergency.

Start Your Long-Term Financial Goal Setting Off Right

Get started on the right foot by checking out our comprehensive guide with actionable steps to setting and achieving your financial goals: “How To Set Financial Resolutions for the New Year.”