How to focus on your finances (2024)

Setting good financial goals can help you eliminate debt, save for short-term or long-term goals or fund your retirement account. It is imperative to develop a game plan for setting good financial goals to attain them and build the wealth you desire.

You can better prepare for the future when you set solid financial goals. But knowing how to set them — and achieve them — is key.

“Financial stability helps people sleep better at night, which is important for overall financial health, and it also makes you feel more confident in the future,” said financial activist and Priceless Tay founder Taylor Price. “Potentially, you could take risks in your career or in a side hustle. That may not be possible without having those financial goals.”

Setting financial goals so you can have "benchmarks" is a good idea, said personal finance coach and TheMoneyCoach.Net founder Lynnette Khalfani-Cox.

“[Obtain] clarity around what you want to do in the short-, medium-, and long-term, and make sure you have achievable results,” Khalfani-Cox said.

For those benchmarks, Khalfani-Cox advised staying away from vague goals.

They might say, ‘Oh, I want to buy a new house at some point in the future,’ or, ‘I want to buy a new house in 2023.’ Well, that's just kind of like a wish. That's not really a goal. You really want to think about SMART goals, goals that are specific and measurable, action-oriented, realistic and time-bound.”

Start With a Self-Assessment When Setting Good Financial Goals

Obtain a clear idea of your finances before developing a game plan for your financial goals.

“From a financial perspective, you have to step on the scale,” Khalfani-Cox said. “If you are saying, ‘I want to pay off debt,’ or, ‘I want to save more money,’ you have to know where you are starting from, what's your starting point.

“I think all too often a lot of people are afraid to do the deep dive or to look in the mirror, and see, ‘OK, how much damage have I done? Where is my level of savings?’ You need to track and measure incremental progress along the way.”

Also, understand what you want to accomplish during different timeframes — and try not to list too many goals to achieve at once, Khalfani-Cox said.

“I think a lot of times people overwhelm themselves with goals, or they don't think out the execution part of reaching their goals and how much effort it is going to take to achieve [them] in a specific period of time,” Khalfani-Cox said.

Develop a Budget to Set Good Financial Goals

“Without having any idea on where your budget is, it's really hard to create financial goals that are SMART,” Price said. “So starting off with a budget is really important.”

“Then ask yourself a few questions like, ‘Are you maximizing your retirement account? Do you have an emergency fund? Do you have debt?’ If so, what's some high-interest debt that you can pay off or offload? Can you save more each month? If you have credit card debt, are you carrying a balance over each month?”

You could start creating your budget by adhering to a budgeting concept called the 50/20/30 method, Price said, which is 50% needs, 20% wants and 30% savings.

“Some people do the other way around where it's 20% savings and 30% wants,” Price said. “I always think savings should go first. But depending on where you live, it's needs-based. If somebody lives in San Francisco, those needs will be a lot higher than somebody who lives in a rural town in the Midwest.”

In addition, Price suggested automating your savings through round-ups to help build it. You can use a round-up app like Acorns or Chime, or opt into a round-up program via your bank.

Learn How to Cut Debt to Set Good Financial Goals

American household debt hit a record $14.6 trillion in the spring of 2021, according to Debt.org. So, it is a good idea to start cutting yours. Once you eliminate debt, you can focus better on saving and other financial goals.

“Having dug myself out of debt, one of the things that I realize now is that getting out of debt is one thing, but staying out of debt is the real thing, is the much harder goal to accomplish,” Khalfani-Cox said. “A lot of people who pay off the debt go right back into debt.”

You can help break the cycle by adopting a new mindset about your finances, Khalfani-Cox said.

“I tell people to think about adopting what I call a zero-debt mindset,” Khalfani-Cox said. “That means, one, having rules and guidelines for when you whip out your credit card. You shouldn't automatically think that using credit to pay is always the norm or is a crutch for you.

Take Advantage of Investing in Your 401(k) and IRA Accounts

Saving for retirement might not be the first thing on your mind when you are younger, but investing in your 401(k) and/or an IRA account as early as possible can help you hit the target for your future financial goals faster.

“Ask your job if they have a 401K available and if they have an employer match back,” Price said. “That basically means free money for that person who has that job. That is the first question to ask because who doesn't like free money?”

Celebrate Small Wins

Remember to celebrate your wins as you set and achieve your financial goals.

“One of the biggest tips that I give people who are goal-setting is to celebrate those small wins,” Khalfani-Cox said. “People want the end result, but again, you have to keep in mind the timeline. Those small victories along the way should be absolutely celebrated, recognized, and compounded. You want to keep doing the same thing that has gotten you results.”

There comes a time in your career when you will encounter someone who is a lot older or younger than you. The working habits of Gen Z and Baby Boomers differ but a simple fix to overcome generational differences is communicating better. Lindsey Pollak, who is a workplace expert and New York Times bestselling author, joined me on the latest episode of my podcast to discuss intergenerational communication. You can read a transcript of the conversation by clicking here. You can also listen to the episode below or by clicking here.

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LinkedIn News' Gianna Prudente will chat with career coach Cynthia Pong about navigating salary negotiations on the Friday, November 18 episode of #GetHired Live. They will go over how to secure the salary you deserve, what to do if you are being underpaid and answer your questions live. RSVP to join them live at 12 pm ET on Friday by clicking the image below or by clicking here.

• What is the 50/30/20 rule? (By Mariah Flores) No matter your job or income, having a budget in place can provide some financial stability in times of uncertainty. The 50/30/20 rule is a budgeting method preferred by many for its simplicity and ease of use. Your monthly income is broken down into three buckets of spending. The percentages in each category can be slightly adjusted based on your income and needs. The 50/30/20 rule can be a starting point to help identify overspending and potential areas of saving. Click here to read more.
• How do you save money on a tight budget? (By Helen Harris) Another month has gone by and you're unable to contribute to your savings account. Where did the money go? Was it the high price of groceries or the cost of gas for that one trip you took? To better save and plan for the future, financial experts recommend dissecting your budget, reevaluating your necessities, taking advantage of the job market, and investing if possible. Click here to read more.
• How do you create a basic budget? (By Ciarra Maraj) Creating a basic budget is easy. Knowing the difference between a want and a need is hard. Be honest with yourself about what you need versus what you want. Take control of your finances by setting financial goals and setting boundaries. Be realistic about how much you spend, and invest to make your money grow. Click here to read more.

It is important to keep track of where your money is going. This LinkedIn Learning course teaches you how to budget and shift your mindset about money. You can live a comfortable life and within your means, this is how. Watch the course below or by clicking here.