Key takeaways:

• Understanding the deeper motivation behind your financial decisions — your “why” — lays the foundation for setting financial goals that are aligned with your values.
• Break your money goals into short-, mid-, and long-term targets using the SMART method.
• Revisit your financial goals consistently, measure your progress, and adjust your plan as life evolves.

Why setting financial goals matters

Setting smart financial goals starts with understanding your full financial picture — including your investments, savings, assets, and liabilities — and the values that drive your money decisions. Setting financial goals isn’t just about watching your bank balance grow; it’s about building freedom, creating a safety net, and having the means to live a little along the way.

Empower research has shown that people who set clear financial goals are about three times as likely to feel happier about their financial situation than those who do not plan ahead. But how do you set financial goals — and, just as importantly, how do you stick to them? Setting meaningful goals starts with finding your “why” — the deeper reasons behind your money goals, savings goals, and investment strategies.   

Read more: 5 key strategies to reach your money goals

5 steps for setting financial goals and achieving them

1: Find your “why” 

A good financial goal is one that aligns with your “why,” but also one that is specific, reasonable, and most importantly, achievable. To find your why, step back and ask yourself questions like:

• What does financial freedom mean to me? Is it becoming debt-free, building wealth, or securing a comfortable retirement?
• How do my values impact my financial choices? Do you want to prioritize sustainable investing or focus on maximizing returns?
• What role does money play in my life? Are you motivated by a dream purchase, debt management, or supporting people that matter to you?
• Who’s coming along with me? Who are the most important people in your life and how will they aid or benefit from your financial aspirations? 

Understanding your “why” helps you set meaningful money-savings goals and stick with them long-term. “When your why is deeply rooted in your values, your money gains a purpose,” says Courtney Burrell, Senior Manager, Advisory & Planning at Empower. “That purpose becomes the force that drives you toward your goals and helps you stick to them.”

2: Do a financial check-up

Before you can plan ahead, you need to assess where you stand. Gather a full picture of your:

• Assets (cash, investments, physical assets like property or vehicles)
• Liabilities (loans, credit card balances, mortgages, etc.)

These form your net worth — a snapshot of your overall financial health.

You can do this manually or sign up for a free Empower Personal Dashboard to sync all your accounts in one place. This will help you track your progress toward your monetary goals.

3: Create S-M-A-R-T financial and savings goals

Now, envision what you want from your future — you may want to think about this in increments such as 5, 15, or 30 years from now. Make a list of at least five goals using the SMART framework: Specific, Measurable, Actionable, Realistic, and Time bound. 

It’s helpful to break your financial goal planning into timeframes:

• Short-term goals are from six months to two years
• Mid-term goals are from two years to five years
• Long-term goals are more than five years in the future 

Examples:

• Build an emergency fund by saving 6 months of expenses in a high-yield savings account within 18 months.
• Save $25,000 for a house down payment in the next 5 years.
• Grow a college fund to $100,000 over the next 15 years.

You can use Empower’s financial calculators to plan out realistic budget goals, long-term savings goals, and retirement targets.

Read more: Saving money for short-term vs long-term financial goals

4: Come back to your “why”

When you’re creating goals to save money, staying focused on your underlying values can help keep you motivated along the way. Are you building wealth to support family, gain freedom, or retire early? Revisiting your motivations makes goal setting stickier — especially when the excitement fades or life gets hectic. Link each of your goals back to one of your key values.  

5: Create an action plan for your financial goals

Each money goal needs an action plan to match.

For example, to save $18,000 for an emergency fund in 18 months:

• Calculate your monthly essentials (e.g., $3,000/month x 6 months = $18,000)
• Divide the total by 18. You’ll need to save $1,000 per month

Achieving other goals may be more complex and require you to make decisions about where and what to invest in. For more complex financial goal setting, you may need to:

• Choose where to invest
• Balance risk and time horizon
• Work with a fiduciary financial professional

Financial professionals support you in reaching your long-term money goals and can serve as an accountability partner for making strategic money decisions.

Read more: What is risk tolerance & how to determine yours

The bottom line

You can’t reach a financial goal if you don’t set one. Defining clear financial goals can help you develop a more strategic and effective plan for saving money, budgeting, or growing your wealth. 

Regularly revisiting your goals ensures they evolve with your life. Empower’s financial professionals recommend reviewing your plan often — because life changes, and your financial plan should too.