Setting Financial Goals (Exercise)

Goal setting is a foundational aspect of a financial plan. For young lawyers who are already goal-driven individuals, financial goals can provide additional focus, motivation, and structure. This Goal Setting Exercise helps lawyers identify their own financial goals and the actions needed to achieve them.

The Importance of Goal Setting

Effective goals share five qualities: clarity, challenge, commitment, feedback, and appropriate task complexity. Financial goals are well-suited to all five — they provide near-instant feedback (a growing savings balance, a shrinking loan balance) and can be broken into manageable steps.

Access the free Setting Financial Goals Worksheet here — click to create your own copy.

Short-Term Goals (Next 2 Years)

These might include building an emergency fund, buying or leasing a car, or changing jobs. Ask yourself: what can I realistically achieve right now, and what would make me feel successful in two years?

Medium-Term Goals (3-10 Years)

Getting married, starting a family, buying a home, making partner, or taking a major trip. These goals can be vague or specific, and it's normal — even healthy — for them to change as life changes.

Long-Term Goals (10+ Years)

Achieving financial freedom, leaving a legacy, starting a business, or funding a child's education. Set these ambitiously; humans tend to underestimate what they can achieve over a decade or more.

From Goals to Action: Backcasting

Imagine you've already achieved your goal, then ask what steps got you there. For a home purchase, that might mean identifying must-haves, choosing neighborhoods, determining a down payment target, saving toward it, and eventually closing. Write down each action item, then start on the smallest one today.

Final Takeaways

Create goals that are clear, challenging, appropriately complex, and provide feedback; group them by timeframe; and identify concrete action items you can start on immediately.