5 Headache-Free Ways You Can Meet Your Financial Goals

Financial goal setting starts with a pretty simple measure: You have to be crystal clear on what you’re aiming to achieve. Knowing exactly what you’re saving for—be it a college tuition fund for your kid or finally eliminating that credit card debt—will help you keep your eyes on the prize. For this exercise, it actually pays to ignore your bottom line at the outset and simply put pen to paper so you can really articulate the goals you’re angling toward. (Don’t hold back.)

Now that you’ve mapped out your financial objectives, take a hard look at the nitty-gritty numbers to really determine where you stand. This goes beyond knowing the balance in your checking and savings accounts. You need to calculate your overall financial picture—everything from how much money you’re bringing in to your credit score and debt-to-income ratio. (An online calculator is a good starting point to help you figure this out, or use Intuit’s free Turbo tool, which automatically calculates your debt-to-income ratio, credit score and verified income.)

Once you have a grip on your net worth, it’s time to start adjusting how much you spend so you can meet your financial goals. But first you’ll need to dig in to uncover your biggest spending areas. That’s where an app like Mint comes in: Simply link your bank accounts, credit cards and bills, and it will automatically categorize your purchases and then crunch the numbers so you can see exactly where you are spending, complete with color-coded insight on the obvious places you can trim. (Whoa, you spent how much on theater tickets last month?)

When setting goals, it’s essential to look at what you have, but you also need to take into account what you might owe down the road. Case in point: You know your car is going to need new tires early next year. Or you might have to pay estimated taxes on a freelance project you took on. (This is where software like TurboTax Self-Employed is a huge help.) It’s all about taking a look at your entire financial picture and anticipating what might crop up on the path to your goals.

With a firm grasp on what you want to achieve, plus a clear understanding of your finances overall, it’s time to implement ways to measure your success. What is the time frame for achieving your goals? What do you have to accomplish each month (or day) to see progress? Be as precise as possible in laying this out—for example, spell out that you plan to save $500 each month—but also allow yourself some wiggle room for unanticipated life things. (This is why padding a rainy-day fund is critical.)

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