1. Identify What You Want and When You Want It
Forget about money for a minute, what do you want in life? These are your big-picture life goals, and it could be anything like going on a trip, starting a business, living in another country, or retiring early. These are things you want in order to be content with your life.
“Getting rich” or “having more money” is not a goal. A goal is the answer to “having more money for what?” Knowing what you’re working towards will help you stay focused and motivated.
Once you have clarity on your life aspirations, put a timeframe on when you want to achieve them:
- Immediate: within 12 months
- Short-term: in 1 – 3 years
- Medium-term: in 3 – 7 years
- Long-term: after 7 years
2. Understand Your Values
Values are your core beliefs and priorities, the principles that affect your decisions and behaviour. These might include things like family, freedom, security, adventure, learning, or health. Understanding your values helps you make choices that feel genuine and meaningful.
It’s also important to understand who and what shapes and influences your values, like your upbringing, culture, life experiences, education, social circles, or personal reflections. As you grow and encounter new perspectives, your values can evolve, especially as you move through different life stages or face challenges. Maybe independence was the top of your list, but now community and connection are more important. That’s why you should periodically review your values and see if your goals still reflect what matters the most to you.
Once you’ve identified your life goals and values, check if they align. If you value security but your goals focus on instant gratification without future planning, there is a mismatch and you need to reconsider your priorities. Aligning the two ensures your money supports the life you want, not just what society or others expect from you. You are also more likely to be motivated to achieve value driven goals, which can help you resist impulse buys or unnecessary spending. For example, if learning is important to you, you would be more motivated to cook at home, bring lunch to work, and save for education, rather than buying take out everyday. Or if you value adventure, then maybe you would rather not spend on non-essentials until you’ve saved up for a trip.
3. Convert Your Life Goals into SMART Financial Goals
Money can’t buy happiness, but nearly all your life goals require some kind of financial support. When you are sure your life goals and values are aligned, the next step is to turn those goals into SMART financial goals.
SMART stands for Specific, Measurable, Achievable, Relevant, Time-bound.
Let’s break it down and take “going on a trip” as an example:
Specific
Define the details which would affect how much the trip will cost. Where are you going? How are you getting there? Where are you staying? Who are you going with?
For example:
“4-days and 3-night holiday in Guilin with a friend, staying in a local hotel, return trip by 2nd class high-speed rail, and using local transport to get around. Plan to do abc activities while there.”
Measurable
How much will it cost? Do your research and set a budget.
For example:
“Expected spending
- Return ticket on high-speed rail: HK$900
- Hotel for 3 nights: HK$300/night between 2 people, total of HK$900 or HK$450 each
- Spending on food and transport: HK$150/day, total of HK$600
- Spending on activities and shopping: HK$2,000 total
- Miscellaneous: HK$1,000 total
Total budget is HK$4,950”
Achievable
Ensure the goal is realistic without causing financial strain. How long will it take you to save HK$4,950? This step works closely with the time-bound element you will read about next.
Relevant
Confirm your action plan is in line with your goal. Including a budget for learning French would not be a relevant thing to do in this instance.
Time-bound
Did you specify this as an immediate, short, medium, or long term goal? Can it realistically be achieved within that timeline? If going on a trip was an immediate goal (within 12 months) but you’re only saving HK$200 per month, it would take you 2 years to reach HK$4,950. In that case, you will need to adjust your expectations or find ways to increase your savings. If you can increase your monthly savings to HK$1,000, then you can hit your goal in just 5 months. This is why motivation (and aligning your goals and values) is so important! Pushing yourself to save that extra HK$800 a month could mean going on your trip in 5 months instead of waiting two full years. Can you forego other spending to achieve this?
For this example, say you can realistically increase your savings from HK$200 a month to HK$500 a month by cutting down other spending, so your goal is achievable in 10 months, within your predetermined time period.
Let’s summarise this for easier reference:
SMART Financial Goal
4-days and 3-night holiday in Guilin with a friend, staying in a local hotel, return trip by 2nd class high-speed rail, and using local transport to get around. Plan to do abc activities while there.
Total Amount Required
HK$ 4,950
Monthly Saving Target
HK$ 500
Number of Months to Save Up
10 months
Target Achievement Date
31 Oct 2025
(Assuming today’s date is 1 Jan 2025)
Final Tip
To make achieving this goal more manageable and aligned with your financial reality, you can incorporate this monthly saving requirement into your overall budget. Treat it like a fixed expense and consider setting up automatic transfers to stay consistent and on track (see how in our Budgeting guide and Budgeting and Tracking Spreadsheet).