It’s only natural that as we get older, our needs and wants become progressively larger and more expensive. Whether you’re ten years old and saving pennies for a new toy, getting a summer job to pay for a car as a young adult or, later, your dream home, the rules for setting budgeting goals are largely the same.
We can spend money on day-to-day things as we please, but saving for specific financial goals takes discipline, attention, and most importantly, a plan.
We’ve identified a handful of steps anyone can follow as they budget to meet a goal, whatever that goal may be. By moving systematically through each step, it’s easier to understand how to think about long-term goals, what tools ease the process, how to avoid making mistakes and how to stay on track.


  1. Decide exactly what it is that you want and write it down. The more specific your goal, the better. It will be much easier to approach a goal like “Save $400 each month to purchase a new car in 3 years,” than it would be to approach a goal like “get a new car when I graduate”. Writing down your goal locks your focus in place and keeps your wants from getting in the way of your needs as time goes on. Speaking of time…
  2. Set a realistic timeframe for your goal. It’s best to categorize goals as short-term or long-term, since both demand different levels of attention and discipline. Short-term financial goals can take three to five years or less to reach and might include things like buying a car, paying off a small loan or planning for a vacation. These shorter goals affect your daily cash flow as you set money aside. Long-term goals, however, can require adjustments to several parts of your lifestyle, considering they affect how you spend and save for five years or longer. Saving for retirement, creating a college fund for a child and buying a home typically all require a budgeter to make big-picture decisions and decide what they can and cannot afford.
  3. Take advantage of financial planning tools. There are countless apps on the market that can help you monitor your finances, determine what monthly contributions you need to make to meet your goals, and display your progress. Xero, a popular mobile accounting app, has features that allow users to overlook their cash flow, stay on top of payment history, and even account for taxes.
  4. Break up your larger goal into smaller objectives. Create a series of smaller milestones that lead up to achieving your overarching goal. Saving $100 per month turns into $1,200 per year if a budgeter stays on track. Marking progress each month keeps people from making careless mistakes like impulse splurging or forgetting to record small expenses. The more months in a row that you meet your progress checkpoint, the better you will feel as you get closer to reaching your goal.
  5. Monitor your progress regularly. As we mentioned above, it’s easier to stay the course if you know where you’re going as well as where you’ve been. If you were hiking through the wilderness, you’d want to check your map every so often to make sure you were headed in the right direction. By checking on your progress toward short-term goals each month and auditing your progress toward those long-term goals on an annual basis, you can ensure you’re not blindly stumbling through the personal finance woods.
  6. Adjust your savings plan as needed. Life happens, and sometimes events arise that change our circumstances. Our financial planning isn’t immune to those changes, whether they help or hurt our savings progress. A plan that’s too rigid can be a bad thing — if your income increases, you may be able to afford to save more, so your plan should let you do it. Conversely, you should be able to adapt to a lesser means, if necessary.
  7. Celebrate! You set your sights on something you wanted, decided what you needed to do to attain it, made a plan and followed it to achieve your goal. Now, it may be time to treat yourself with the funds you’ve been using to reach that goal, or, set your sights on a new plan.


Almost everyone gets better at budgeting, planning and saving with a little practice. No goal is too lofty, as long as you are willing to put forth the required amount of time, focus, and resources.


The more time you give yourself, the easier it is to get started. So look down the road, decide how you want your finances to appear, and go through these steps to get yourself headed in the right direction, starting now.


For more help in creating an effective budget, download MSM’s new Guide to Better Budgeting.