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How to set financial goals

Envisioning your dream life is easy enough but making it a reality is the challenge. The SMART method can help.

By Jess Irvine

6 January 2025

CommBank's personal finance expert Jess Irvine at a desk.
  • The best goals will factor in your personal circumstances and be SMART: specific, measurable, achievable, relevant and time-bound. 
  • CommBank personal finance expert Jess Irvine shares five steps that can help make your financial ambitions a reality.

Many of us have had New Year’s resolutions that didn’t go the distance. That’s because setting and achieving money goals is a hard skill to master. The best goals will factor in your personal circumstances and aspirations and should be SMART: specific, measurable, achievable, relevant and time-bound. To put it simply, they should represent a dream with a price tag and deadline attached. Whether you want to pay off a high-interest debt, build an emergency fund or save up for a home deposit, these steps can help make your financial ambitions a reality.

1. Identify your money dream

Ultimately, we’re all just trying to secure enough cash to buy the things we need and want over our lifetimes so it’s important to get a rough sense of what you want that to look like. Are you reading a book in a home that you own in retirement? Or sailing around the Bahamas on a luxury yacht? Envisioning your future will help you set meaningful financial goals.

If you need help getting started, grab a piece of paper and a pen (or your tablet) then set a timer for 10 minutes and jot down any words or pictures that represent your ideal life. Think about what your perfect day would look like, from dawn to dusk and use that as the North Star for your goals so they’re relevant to achieving your money dream.

2. Give it a dollar value

Do some research to make sure you are putting a realistic price tag on your money goals. If you want to buy a home in a particular area, what size deposit will you need? Exactly how much are you looking to pay down in debt or save up for that new purchase? Attaching a clear dollar amount to your goals will help you track their progress and know whether you’ve reached them—making them specific and measurable.

Tip

If you need a little extra incentive, CommBank’s GoalSaver or NetBank Saver accounts give you access to features in the CommBank app that help chart and visualise your progress. You can also share your goal with a friend or family member who can support you while keeping you accountable.

3. Set a deadline

Rather than paying off a debt “at some point”, decide on a timeline. Perhaps it’s paying it off over 24 months or saving a fixed dollar amount for your emergency fund over 12 months. Most importantly, make the timeframe realistic for your dollar value. From there, break it down into smaller, achievable chunks. If you aim to save $2000 in 12 months, you’ll need to set aside about $38.50 a week or $167 per month. Automating your savings or payments can keep you on target to meet your deadline.

4. Stay accountable

Once you’ve identified your money goal and it has a price tag and deadline, be sure to regularly check in with your goal—this will keep you motivated. It can be useful to write it down or, if you’re a visual person, find a picture that relates to your goal and save it as the lock screen on your phone or put it on your fridge as a reminder of where you’re heading.

5. Don’t beat yourself up

If you can’t keep up with the pace that you initially set for your goal, don’t abandon it completely. The important thing is that you’re moving in the direction of your money dream. If something happens and the timeline needs to change a bit so be it. Stay committed to your vision and don’t be afraid to start over or modify the plan if needed. And remember to regularly check in with your money dream to make sure it’s still relevant—setting financial goals is about trying to create the life you want for yourself. There are no wrong moves and no limit to the number of times we get to attempt to build our dream lives.

6. Celebrate your wins!

When you do achieve a goal, take a moment to acknowledge your success and how it’s helping you move towards your ideal lifestyle. To celebrate, you could treat yourself to something small as a reward for the sacrifices you’ve made to get here. But don’t overlook the sense of satisfaction you can get from achieving something that aligns with your life goals. Be proud of yourself and how far you’ve come and use that sense of pride to motivate you to achieve your next goal.

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An earlier version of this article was published in Brighter magazine.

This article provides general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as personal financial product advice. The views expressed by contributors are their own and don’t necessarily reflect the views of CBA. As the information has been provided without considering your objectives, financial situation or needs, you should, before acting on this information, consider the relevant Product Disclosure Statement and Terms and Conditions, and whether the product is appropriate to your circumstances. You should also consider whether seeking independent professional legal, tax and financial advice is necessary. Every effort has been taken to ensure the information was correct as at the time of printing but it may be subject to change. No part of the editorial contents may be reproduced or copied in any form without the prior permission and acknowledgement of CBA.