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Why Setting Financial Goals Changes How You Invest

You want to use your money for something in the future, right? Let's talk about how to do that effectively.

Setting goals is a smart way to help you accomplish any task.

It’s hard to run a race without a finish line; a to-do list helps you organize your day. Investing is no different.

At Betterment, we believe in developing financial goals to help you save and invest. A nice little retirement. A “just in case” safety net. A trip around the world. Your child’s education. Or a magic number you’re looking to hit. No matter what you’re saving for, setting financial goals is proven to help get you there.

An added bonus: Planning for your goals now, even if they seem far away, means you probably won’t have to save as much. That’s because you spend more time invested in the market and more time with our tax-smart technology.

What makes a good financial goal?

It’s not enough to name a goal, choose an amount, and wait for the money to appear. (Although if you figure that one out, definitely let us know.) A good financial goal, like any type of goal, takes thoughtful consideration.

First, start with something specific. What do you want to use this money for?

Next, think about how much you’ll need. Do a little research. Ask a trusted friend. Try our financial planning tools.

Finally, consider your timeline. When will you need this money? Is it flexible?

If you’re not sure of an exact goal, you can always start investing now and work it out in the future. It’s better to get started with a vague idea than to do nothing at all.

5 Types of Financial Goals at Betterment

How Goals Help Us Help You

Once you’ve set a financial goal that includes a specific goal type, an amount, and a time horizon, we can help you plan how to achieve it. We’ll advise you on the right account type for your money and the right allocation based on when you want the money and your tolerance for market ups and downs.

We’ll suggest a specific amount you can regularly invest using our auto-deposit feature. (Think saving on autopilot.) This can help you set realistic expectations—just like training for a race. Seeing what you’ll need to invest on a regular basis to achieve your goal can help you adjust your timeline or your investing priorities.

Once you’re all set up, we’ll align your financial goal with our advice. We’ll even analyze accounts outside of Betterment (once you sync them) to help you get a sense of your full financial picture. This way, you can always see how you’re tracking over time.

Setting Financial Goals

More insights on setting goals

Funding a Safety Net: Calculate Your Target Amount

Don’t know how much to set aside for emergencies? Don’t let uncertainty stop you from saving. We’ll help you figure out how much you should save so that you can feel more prepared.

9 Reasons Goal-Based Investing Leads to Success

What exactly are you saving and investing for? This is a serious moment of self inquiry.

What's Next?

Set some financial goals, of course! If you’ve already got one or more in mind, you can get started right here. If you still need some time or want to dive deeper, check out our suggested articles below.

More on Financial Goals

The Recommended Allocation To Keep Up With Inflation Has Changed

For funds that seek to match or beat inflation, like a Safety Net goal or Emergency goal, we seek to take on minimal risk while allowing your portfolio the potential growth needed to keep up with inflation. Learn about our updated portfolio allocation recommendations for your emergency funds.

A Creative Strategist Making $135K In Chicago Dreams Of 1mm In Retirement

How this goal-oriented couple can save for the unexpected while still dreaming big for retirement.

A Development Director Making $100K In DC Envisions A Debt-Free Future

How one person can balance paying off credit card debt, preparing for the unexpected, and becoming more financially literate.

4 Questions To Help You Invest For Your Financial Goals

There are many factors to consider when investing for the first time: Use these four questions as a guide to help you choose the best investment strategy for your financial plan.

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