Why money goals are important and how to set them

It's the first step to sorting our finances: working out where we want to be moneywise and what our priorities are. 

Setting financial goals helps us focus our money and our lives. Goals can be short or long term, small or large, but they all need to be achievable. Many of us tend to underestimate how much we can achieve over time!


How to set money goals

  • It helps to be specific, realistic, and to write them down. Keeping each goal simple and giving it a timeframe and a dollar amount is ideal.
  • We can set some big money goals – like saving an emergency fund, buying a home in the next five years or saving for retirement (this could be the biggest money goal of all).
  • Some smaller financial goals can help us get there – like saving for a deposit or paying off credit cards.

The Sorted goal planner can help you organise your short, medium and long-term goals. It will also show you where to go to start working towards them!

Some starter goals to consider


Pay down debt

If we have high-interest debt, like credit card or hire purchase, the main goal should be to pay that debt off first and as soon as possible. This could involve restructuring the debt into lower-interest loans.

Our guide to getting out of debt can help.


Save an emergency fund

It's a good idea to put money aside for emergencies. Start by saving up $1000 as quickly as you can.

Ideally, over time we should aim to save up the equivalent of three months’ expenses – but every little bit helps when life throws curveballs our way, like big bills on the car, a job loss or unexpected illness. 

It’s a good idea to have this fund in a savings account separate from our normal everyday bank account.


Start saving for retirement

The earlier we start saving for retirement the better. Even a small amount saved every week or month can add up to a lot over time.

Check out how compound interest can supercharge your retirement savings over time with the savings calculator.


Increase your mortgage payments or KiwiSaver contributions

If we have a mortgage and can afford to increase our repayments, a goal may be to save on interest by paying off the loan faster.

If you don't have a mortgage, but do have a KiwiSaver, bumping up your regular contributions can help you save a deposit for a first home or for your retirement.

Taking action

Actions are the steps we take to reach our goals. Here are some examples:

  • If a goal is to save for a house deposit, one action may be to open a savings account by next pay day and save $50 a week into this new account.
  • If a goal is to save for retirement (or to save for a deposit on a first home), we might find out about making the most out of KiwiSaver.
  • If we pay our mortgage monthly, our goal could be to change to fortnightly repayments of at least half the amount we were paying each month. Because there are 26 fortnights a year, this will pay off the mortgage faster and save on interest.


Reviewing goals

In six months or a year, let’s review those goals. And when we achieve a goal, let’s celebrate! Then we can set new ones to work towards.

New Year is a great time to think about goals – write those resolutions down!


Setting goals in a relationship

Life’s a lot easier when we’re on the same page with our partner about the future. Both partners need to be involved in the process of setting goals and making a financial plan. Our guide to planning in a relationship has some helpful ideas for you to get started together.


Growing net worth over time

Knowing our net worth – the difference between what we own and what we owe – is an important part of setting financial goals and building a financial plan. It’s the way to know whether we’re getting ahead or not. Find out more in our guide to net worth.

Don’t know where to start?

Check out our 6 steps Get Sorted programme to get you on track.

Head to the 6 steps