Adulting is a rat race that involves a constant battle for status, money, power, and fame. With buzzwords like FIRE (Financial Independence, Retire Early) and milestones like hitting S$100,000 in savings by the time you reach the age of 30, achieving your financial goals can feel more daunting than ever.
There can be a lot of pressure to set new financial goals that you can actually maintain and achieve. However, in the age of the burnout epidemic, it’s important to also take care of your mental health. Read on to find out how to measure your goals, and set them without losing yourself.
What are financial goals?
Financial goals are the financial milestones you have for your money in the next phases of your life. It could be in the form of short-term goals such as this month’s budgeting, or something more long-term such as investing for your retirement.
Financial goals are essential because they alter the way you view your finances and allow you to be more aware of how every decision can affect your financial health.
How do I not lose myself while setting financial goals?
The financial goals you set should not define you. But at the same time, they should drive you. It can be easy to get carried away – we get so obsessed with achieving a milestone and see it as a stepping stone to happiness, so much that it gradually becomes our identity.
Some goals will take years, or even decades, to achieve. Remember to be patient with yourself while trying to hit your financial goals, and consider the following:
1. What are my top priorities in life?
Everyone is different, and will care about different things in life. Take some time to figure out what matters most to you – is it to have children, retire early, or to travel around the world? When you get your priorities straight, it is easier to reduce or eliminate your redundant expenses that might be in the way of your financial goals.
Of course, this does not mean that you should forgo the other goals that are not on your list of priorities. Instead, you can review your other goals on a quarterly basis. When the time comes, you may already have gotten a pay raise, or hit some of your other goals, and are ready to progress to other priorities.
2. How do I reach these goals on my budget?
Hitting your financial goals will require some compromise. This may involve cutting back on expenses, or adjusting your timeline.
Make use of everyday hacks to save some money, including:
- Work: Packing your own lunches
- Subscriptions: Reviewing your subscriptions or using free alternatives
- Travel: Booking flights in advance and keeping a lookout for deals, so you can save on airfare and accommodation.
These everyday habits can help saving feel more natural over time, and eventually lead you to achieving your financial goals. The key is to start small and start saving, rather than be fixated on the amount you save. This will help you feel that you are sacrificing less, gradually building healthy money habits that will aid you in the long run.
3. How do I break my goals down into short and long-term financial goals?
In a nutshell, long-term goals may take three to five years (or even more), while short-term goals can be achieved within six months to three years.
Often, long-term goals consist of many short-term goals. These short-term goals break your long-term goals down into smaller pieces, so you can ultimately achieve your bigger goal. For instance, you may be an entrepreneur. In order to build a brand, you will have to hit a short-term goal of researching, pitching, and receiving funding or raising capital, before you can eventually hit your long-term goal of being a brand well-loved by the masses and hitting 6-digits in revenue.
When you only think of your long-term goal, it can feel overwhelming to reach that end goal. However, when you split them into short-term goals, it can feel more achievable. Start by:
a. Setting your long-term goal
Evaluate and identify your long-term goal, one that would take you a considerable amount of effort and time to hit. An example could be starting a brick-and-mortar shop.
b. Setting your short-term goal
Work backwards from your long-term goal and think about how you can achieve them in smaller steps. Using the same example, starting a brick-and-mortar shop may require a 6-digit figure, but the short-term goal could be a mere low 4-digit figure to save monthly – which makes the long-term goal seem a lot more feasible.
Over time, don’t be afraid to adjust your goals as your priorities change. Adjust or even scrap your plans to start on a fresh page in your journey to attain your long-term goal.
4. How do I measure my goals?
When it comes to measuring your goals, be as specific as you can. When you are not working towards any specific goals, chances are that you will be likely to spend more than you should.
To keep track of your progress, you should be able to quantify your goals and examine a key metric. This will also identify the mark at which you have fulfilled your task.
Instead of saying “I want to retire early”, aim for a more specific action plan that is measurable, e.g. “I want to save S$2,000 a month over a span of 5 years so I can earn enough capital to start a small business”.
Here’s an example of how to measure your goals:
| Goal | Timeline | Amount Needed | Monthly Savings* |
| Early retirement | 35 years | S$1,000,000 | S$2,380.95 |
| Capital for starting a business | 5 years | S$100,000 | S$1,666.67 |
*Assuming that this amount is purely set aside for saving purposes, with no investments made.
Make it a point to set a yearly check-in with your finances to review whether you are on track. For instance, at the end of the first year, review if you have reached S$20,000, in order to reach the S$100,000 capital you require at the end of 5 years.
5. Am I happy?
Your happiness matters. While it is important to plan for the future, you also have to take care of the present. Does your current lifestyle and money habits allow you to enjoy the things you love? Or are you constantly fretting over money, and feeling guilty over every financial decision?
Life is all about balance – if your money habits are making you unhappy, perhaps it’s okay to take a step back and reevaluate your goals. Remember to be kind to yourself, and it is perfectly alright if you take a longer time to hit your financial goals. After all, there is no price tag on happiness.
Don’t be afraid of failing
Learn from your failure and keep going. When you fail at achieving a goal, it doesn’t mean you aren’t good enough. After all, a goal should be challenging enough to push you. Know that even when you don’t hit your goal, it is perfectly okay. As they say, life is a marathon – don’t be too harsh on yourself when you fail, and remember to praise yourself when you succeed.
