By: Declan Sweeney, Experiential Programming and Outreach Coordinator (Financial Literacy)
How to start planning your financial goals
Identify your needs, wants and values to ensure that you are accurately reflecting them in your goal setting.
Here are some questions to ask yourself to better understand your money habits and how they contribute to your financial wellness:
- “I enjoy spending money on this because…”
- “I dislike spending money on this because…”
Then, you can start aligning your purchasing decisions based on what you value — and how much you value each purchase.
Identify your current financial situation
Determine your current financial status by reviewing your current income, expenses, savings and debt (including the interest rate) to understand your starting point and what is feasible.
Setting your goals
All financial goals are usually about opportunity cost and the trade-offs that come when making this decision.
For example: “Saving $50 a month might mean I have to reduce my discretionary spending.” This means that evaluating your current spending and determining where you can potentially reduce or reallocate your money is essential for meeting these goals.
Make sure to determine your time horizon and risk tolerance:
- Time horizon is the length of time you expect to hold an investment before needing to use the money.
- Risk tolerance is your ability and willingness to accept changes in the value and possibility of loss.
Simply, this means that a short-term time horizon will likely mean taking less risky investments or strategies, while longer time horizons will allow for more consistent investment and risk associated with your goals.
Being SMART with your money
As with any type of goal setting, it’s important to think about what’s specific, measurable, achievable, realistic and time-bound (SMART).
Setting SMART goals, using tools such as the Prosper Canada SMART Goals Planner, can help support your ability to action and understand challenges which may impact your ability to meet these goals.
How we can help
If you are interested in meeting your financial goals for the upcoming year, consider reaching out to money@mcmaster.ca. We can support the planning and strategy so you can meet your goals for 2026!