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Affording the things you want as a young adult is achievable when you follow these strategies when setting your financial goals.
Having a bucket list in your 20s doesn’t have to be a pipe dream. No matter what you desire to accomplish—whether it’s going on a summer European trip, getting a new car or paying off student loans—there are steps you can take to attain your goals.
Even though the cost of living is rising, you can still build a solid financial plan to fund your dream lifestyle. There are plenty of proven benefits to creating financial goals, including giving you a sense of purpose and the ability to measure your progress.
The life situation you are in should have some influence on the goals you set for yourself. Let’s take a look at examples of goals you could have, based on two different scenarios. Keep in mind that setting goals that are SMART (short for specific, measurable, attainable, relevant and time-bound) will ensure that they are realistic and achievable.
Dedicating several years to being a student, when you learn the skills and knowledge needed to launch your career, is a big commitment. Countless hours go into obtaining a degree or certificate with the ultimate goal of landing a job that will help you make a living. Between tuition and textbooks, housing costs and making time for rest and relaxation, it’s also a period that comes with a lot of costs. Here are a few sample SMART goals that can make this expense feel more manageable. Note for each what is specific, measurable, attainable, relevant and time-bound.
As a young adult, landing your first full-time job is a significant milestone. It gives you the opportunity to become more independent. But it’s not uncommon to have a starting salary that’s on the lower end of the industry pay scale. With that in mind, here are examples of financial goals that can start you off on the right foot. Of course, your own SMART goals should be based on what you want to achieve. Again, see how each one is specific, measurable, attainable, relevant and time-bound.
It’s not easy to find a balance between paying off debt, saving for a rainy day and investing for the future. It often comes down to prioritizing your goals and assessing your progress on a regular basis. Here are a few ways to make that process more manageable.
One of the easiest ways to keep track of your various goals is to set up separate savings accounts—one for each goal. Instead of grouping all your savings into one account, splitting them up makes it easier to see the different goals you are working towards and the progress you’re making.
You can label each account with a “nickname” that reflects the item you are saving for, the end-goal amount and the date by which you want to have saved it. Here’s what that might look like when you log into your online bank account.
| Account nickname | Account balance |
|---|---|
| Emergency fund: $2,000 (Jan. 15) | $450 |
| Car deposit: $5,000 (June 1) | $2,500 |
| Summer European trip: $1,500 (March 31) | $975 |
If your employer pays you on a consistent schedule (for example, bi-weekly), you can set up an automated transfer in the desired amount from your chequing account to the various savings accounts. This “set it and forget it” method eliminates the manual process of remembering to do this yourself. It also helps you to prioritize your financial goals over other unexpected expenses that may arise and keep you from sticking to your plan.
Sometimes life gets in the way, and you may not be able to meet your target as planned. That’s not only normal, but also completely OK. Remember that you can and should monitor your progress and make adjustments when necessary.
For instance, let’s say you’re on track to meet your goal of buying a new laptop. However, you notice that you’re falling behind on payments for this semester’s tuition and textbooks. In this case, you may want to reduce the amount you spend on clothes from $250 to $150 next month, so that you can allocate the remaining $100 towards paying your tuition fees. Sometimes, achieving your goals requires some give and take.
Don’t forget to celebrate your achievements! After all, you’ve worked hard to make it happen. You deserve to share your accomplishments with your friends and family. Whenever you complete a goal, use it as an opportunity to level up and set the bar higher. That way you are routinely fine-tuning your financial roadmap and challenging yourself to accomplish even loftier goals.
Video: Why open a high-interest savings account?
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