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.
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 prepared.
Retirement Planning Advice That Matches How You Save
Betterment is constantly working to align our investment advice with what it’s really like to pursue your financial goals. Learn about how our retirement planning advice continues to improve.
9 Reasons Goal-Based Investing Leads to Success
What exactly are you saving and investing for? This is a serious moment of self inquiry.
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
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.
What the Ultimate Betterment User Looks Like
We're going to break down how to get the most value out of the goal-based money manager Betterment is designed to be.
Goal-Based Investing: A Decade In Review
As we all look forward to and plan for the future, let’s stop and take a look at the past decade to see what we can learn from it.
Using Investment Goals At Betterment
Goal-based investing. The idea is prized among financial advisors—and our team at Betterment—but to the everyday investor, it’s often difficult to put into practice.
How would you like to get started?
Manage spending with Checking
Checking with a Visa® debit card for your daily spending.
Save cash and earn interest
Grow your cash savings for general use for upcoming expenses.
Invest for a long-term goal
Build wealth or plan for your next big purchase.
Invest for retirement
Set up traditional, Roth, or SEP IRAs to save for the golden years.