Set money goals and make a plan

A goal you can picture is much easier to save for than “I should have more money”. This guide helps you turn your hopes into a plan with numbers, dates and next steps.

Why goals matter

Money has a habit of drifting away when it has no job to do. A clear goal gives every dollar a purpose.

Goals also help you say “no” to spending that doesn’t matter to you. That’s not about being strict. It’s about choosing what you care about most.

Make your goals specific

A useful goal answers three questions:

• What is it for? (A car, a holiday, a home deposit, retiring early)
• How much will it cost?
• When do you want it?

“Save for a holiday” is a wish. “Save $3,600 for a trip to Bali by next December” is a goal. Once you know the amount and the date, you can work out how much to put aside each week or month.

Sort goals by time frame

How long you have changes how you should save or invest.

Money you need soon shouldn’t be in investments that can fall in value. If the share market drops the month before you need your deposit, you might have to sell at a loss.

Get the foundations right first

Before you start investing, it helps to have three things in place.

1. A budget. You need to know what comes in and what goes out. That tells you how much you can put towards goals.
2. An emergency fund. Many people aim for around three months of essential expenses. This stops a car repair or job loss from turning into credit card debt.
3. A plan for costly debt. Paying off a credit card charging 20% interest is like earning a guaranteed 20% return. Few investments can reliably beat that.

Put your plan on paper

Your plan doesn’t need to be fancy. A page in a notebook or a simple spreadsheet works. For each goal, list:

• the goal and why it matters to you
• the amount and the target date
• how much you’ll put aside each pay
• where the money will be kept
• the first step you’ll take this week

Rank your goals. You probably can’t do everything at once, so decide what comes first. Some people work on one big goal and one small goal at the same time, so they get a quick win while chipping away at the bigger one.

Make it automatic

The easiest plan is one you don’t have to think about. You could:

• set up automatic transfers on payday into separate accounts for each goal
• name each account after the goal (for example “Bali 2027”)
• increase your transfers a little each time you get a pay rise

Automatic saving takes willpower out of the picture. The money moves before you’re tempted to spend it.

Check in and adjust

Life changes, and your plan should too. A new baby, a job change, a separation or a health setback can all shift your priorities.

Look over your goals at least once a year. Ask yourself:

• Am I on track? If not, should I change the amount, the date or the goal itself?
• Do these goals still matter to me?
• Is there a new goal I should add, like topping up super or getting insurance?

Falling behind isn’t failure. Adjusting the plan is part of the plan.

Where to get free help

• Moneysmart has free tools and guides on budgeting and goal setting: https://moneysmart.gov.au
• Financial Information Service (Services Australia) offers free, confidential financial education to anyone. Call 132 300 and say “Financial Information Service”. It doesn’t give personal advice.
• National Debt Helpline on 1800 007 007 offers free financial counselling if debt is getting in the way of your goals.