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Financial Goal Setting


Think before answering this question, because how you answer will be central to setting financial personal and family goals.


Doug: Welcome to the Science of Economic Freedom. I’m your host, Doug Fabian. This podcast is all about helping you achieve your financial dreams. We call that economic freedom. This program is about your journey to achieve economic freedom for yourself and your loved ones.

Today I want to help you identify your next step on that journey. This is episode four, “What Does Economic Freedom Mean to you?” Let’s talk about setting your financial goals.

This is the most important episode of our foundational material. This is where the journey begins for you. Our purpose is to help you quantify your goals, write them down, establish clear direction for your financial success.


The importance of financial goal setting?

Setting goals gives us direction for our future. This inspires us, motivates us to start changing aspects of our own lives that are preventing us from achieving economic freedom. Setting goals allows us to start new habits, become more conscious of what we’re doing with our money, and moving towards our objectives. With a vision and goals we can become a better version of ourselves.


How to set your financial goal

If we’re going to journey across the country from Los Angeles to New York City, what route would we take? What mode of transportation would we use? Do we want to stop along the way, or do we want to get there today? A destination and timeline are essential. We can make adjustments and changes along the way, but we must know where we’re going.

Now, this goal setting process does not need to be complicated nor elaborate, it just needs to be yours. You need to describe what economic freedom means to you. And if you do this, you do this goal setting exercise, you will be in the minority of people. Now, most people fail to set goals, and they do this for many reasons. Some are afraid to write down their goals due to fear of failure. Others choose not to set a direction. They just want to go through life day to day. Now, some people are so unhappy, they’re so unhappy with their lives that they would never subject themselves to this challenge, because there are just too many obstacles of life in their way. This is the most important step on your journey and the most exciting. It is all yours.


The definition of economic freedom

Economic freedom is achieved when you have accumulated enough assets not to worry about money. Economic freedom allows you to be free of worry and stress about money. It is the freedom to do what you want to do. Go to work if you want to, volunteer, change the world, enjoy time with your family. Freedom to choose what you want to do with your time, that is economic freedom.



Now let’s start with some brainstorming. What does your economic freedom look like? How would you describe your financial success if you were to tell a loved one or a friend about it? When do you want to achieve it? Time is an important component in goalsetting. Describe your income, your assets, your accomplishments. Remember we are brainstorming. Does economic freedom mean owning a home, cash in the bank, a pension plan or a retirement nest egg, owning your own business or owning rental property and living on passive income?

Just so you know, economic freedom does not mean a shining house on the hill for everybody. Let me describe one woman’s economic freedom. At the time I met this woman she was economically free at age 90. Her balance sheet was simple. She owned her home and had a small savings in the bank. She had adequate income streams from her deceased husband’s Social Security and small pension. She was happy and content. She did not worry about money. She had two children and two grandchildren who loved and cared for her. She was happy and she was free. She did not desire nor need a two-million-dollar balance sheet. She had $400,000 and she was good.

Now back to our brainstorming. Your first milestone in your journey may be financial stability. You’re starting to save money every month. You’ve paid off your credit cards and you have your spending under control. Now you may want to purchase your first home, so your priority is building up a savings account for a down payment. Some of you may be closing in on retirement, you’re less than 10 years away, getting a handle on your spending, your savings, your investments, and your future income streams may be your top priorities.

For those of you on the doorstep of retirement or in retirement, your spending and income streams matter. How are your investments doing? What’s on your balance sheet? Is your estate plan up to date? The purpose of brainstorming is to come up with ideas, possible options. Now, if you’re married or in a relationship it is important that you work with your spouse or partner on this exercise together. In our special report we have a single page form to fill out on brainstorming. This should be fun, this should be enjoyable, and this should not be a chore.


Select three to five financial goals to focus on

These will be your draft goals. Let me give you some examples. Maybe you want to retire bad debt. We define bad debt as credit card debt, student loan debt, automobile debt, or personal debt. You want to start saving towards a specific goal, maybe that’s $500 a month, or saving 10% of what you make. You might want to start funding your IRA or 401(k) to its maximum potential. Increasing your investment returns could be a goal. You may need to hire some help, a CPA or a financial advisor or an estate planning attorney. Earning more money may be a goal. Getting your spending under control. Starting to fund a college account for your children. These are just ideas, choose the ones that work for you.


Finalize financial goals and create action steps

Our final goals need some detail, and there is a process to improve clarity on goal setting, it’s called SMART testing your goals. Now, SMART is an acronym.

S is for specific. The more specific you are in describing your goals the better your action plan will be.

M is for measurable. Each goal must be measured so we can monitor it.

A is for attainable. These goals must be attainable for you.

R is for relevant. Why? Why does this goal matter to me?

T is for time. All goals must have a timeframe.

The final goal forms in our report ask you SMART questions to help you with that clarity. Once you’ve created SMART goals, you’re well on your way to achieving them.


Goal setting for those under 30

Now let’s talk about four different types of listeners, these are more ideas and directions. If you’re under 30, you’re just getting started. What’s on your balance sheet right now? What are your assets and what are your liabilities? How much money are you saving? Is there debt you want to pay off? When do you want to achieve economic freedom? Give yourself an age. Do you want to save 10% or more of what you make? Retire your bad debt, earn more money, or spend less money?


Goal setting ideas for those of 30 to 50

These are the building-your-balance-sheet years. Want to begin with, where is your balance sheet today. Do you have a spending plan? How much money are you saving? Is your cashflow good? Have you paid off the bad debt? Are you maximizing your retirement accounts? Saving money for college if you have kids? And do you have a retirement date?


Goal setting for those 50 to 65

Now you’re getting closer to retirement, you’re getting closer to your economic freedom. Still begins with your balance sheet and your spending plan, but at this point and time in your life you should also have an estate or a legacy plan, and then ask yourself these questions. What is the greatest threat or worry for your economic freedom? What is keeping you from achieving economic freedom? And how can you improve your spending plan in the next 12 months?


Goal setting for those 65 and older

Those of you who have achieved economic freedom, you still have a balance sheet, spending plan, and of course, we haven’t talked about it, but taxes. Questions again. What could take your economic freedom away from you? What do I want to do with my time? How can I have an impact on the lives of others? How can I make the world a better place?


Things to remember about financial goal setting

  • A goal can be set in terms of things like I want to buy a house, or actions, I want to earn more money or I want to improve my investment returns.
  • The more specific the goal the bette.
  • Make the goal a stretch, hard to do, don’t make it easy.
  • Share your goals with others: your spouse, your parents, your brother, your sister, or even me.



Please visit Go to the Resources page and download the special report, “Goalsetting: Create Your Plan for Economic Freedom.” Print this report out, write out your goals, and you will be well on your way to achieving them. This is Doug Fabian. Thanks for listening.

Announcer: The Science of Economic Freedom is intended as an investor education resource. The views and opinions expressed on this program should not be construed as a recommendation to buy, sell, or hold any specific security. Consult your investment advisor and read any investment prospectus carefully before making any changes to your investment portfolio.

This program is sponsored by Mercer Advisors. Mercer Global Advisors, Inc. is registered with the Securities and Exchange Commission and delivers all investment-related services. Mercer Advisors, Inc. is the parent company of Mercer Global Advisors, Inc., and is not involved with investment services.

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