A beginner’s guide to setting financial goals

In an era of accelerating economic change and increasing financial challenges, setting financial goals has become the cornerstone for anyone aiming to build a secure and stable financial future. Whether you're at the beginning of your career or in the middle of it, defining clear and measurable financial goals is the first step toward financial success.

This guide provides a comprehensive framework for beginners — especially in the Gulf region — on how to set smart financial goals based on analysis, real-life examples, and credible sources.

What are financial goals and why are they important?

Financial goals are specific plans an individual aims to achieve in the short, medium, or long term, and they revolve around managing money and achieving financial security. Examples include saving for a car, paying off debt, building an emergency fund, or saving for retirement.

Benefits of Setting Financial Goals

• Directing spending toward personal benefit
• Enhancing the ability to save and invest
• Reducing impulsive financial behavior
• Building confidence in handling money
• Preparing for the future and managing crises

Insight
 A Harvard Business Review study found that individuals who write down and regularly review their financial goals achieve success at a rate of 76%, compared to just 43% among those without specific goals.

Types of Financial Goals by Timeframe:

1) Short-Term Goals (3 to 12 months):

Example: Pay off a credit card, buy a laptop, save for travel

2) Medium-Term Goals (1 to 5 years):

Example: Marriage, buy a car, start a small business

3) Long-Term Goals (Over 5 years):

Example: Retirement, purchase real estate, fund children’s education

Pro Tip

Start with short-term goals for quicker wins and motivation, then gradually move on to larger ones.

Steps to setting financial goals

1. Assess your current financial situation

• Analyze income sources
• Review fixed and monthly expenses
• Identify debts and liabilities
• Calculate your net worth

2. Define your values and priorities

• What matters most financially? Security? Travel? Real estate?
• Do you want financial freedom or career security?

3. Use the SMART framework

• Specific: Clearly define your goal (e.g., buy a car)
• Measurable: Set a value (e.g., save 20,000 SAR)
• Achievable: Make sure it fits your income and expenses
• Realistic: Within your financial capabilities
• Time-bound: Set a timeframe (e.g., 12 months)

Example

Unclear goal: “I want to improve my finances.”SMART goal: “I will save 1,500 SAR per month for one year to build an 18,000 SAR emergency fund.” Budgeting as a tool to reach your goals A budget is your roadmap to achieving financial goals. It helps:

• Allocate specific amounts toward goals
• Cut unnecessary expenses
• Track your financial performance

Tools

• Mahfathati budgeting app
• Google sheets planner
• Budgeting tools from banks like Al Rajhi or Al Ahli

Insight

According to the World Bank, people who create and stick to a monthly budget are 53% more likely to reach their financial goals. Emergency Fund as a Core Goal!

Why it matters:

• Covers expenses during job loss
• Helps avoid relying on loans or credit cards

Recommended minimum:

3–6 months of total monthly expenses

Example

Abdullah, a Saudi employee, built an emergency fund covering 5 months of expenses by consistently saving through direct payroll deduction.

Smart Financial Tools to Help You Succeed

• Tharwa – Automated investing
• Derayah – Portfolio management
• Raya – Financial planning platform
• Finxar – Goal-tracking for savings

Tip

Set weekly reminders to monitor your goal progress. These help you stay motivated and focused.

Overcoming Common Challenges

Most common obstacles:

• Irregular income
• Family obligations
• Lack of savings culture
• How to overcome them:
• Allocate a fixed percentage of any income (10–20%)
• Break large goals into smaller tasks
• Build a support network of friends or family

Study

A Cambridge University study showed that those who use group motivation are 27% more successful in achieving financial goals. Align Financial Goals with

Life Goals

It’s important to link financial goals to your personal aspirations:

• Early retirement = requires more investment
• Love to travel = set an annual travel budget

Gulf example

Amal, a young Emirati woman, managed income from home-based businesses to fulfill her dream of studying culinary arts in Italy. She saved 20% of her earnings for two years to fund the trip.

Tracking Progress and Reviewing Goals

Regularly

• Monthly check-ins: Did you meet this month’s target?
• Annual review: Do you need to adjust the timeline?
• Priority updates: Have your circumstances changed (e.g., marriage,
• children)?

Tool

Use reports from financial apps or create a monthly review spreadsheet.

Tips for Long-Term Financial Success

• Don’t delay saving
• Avoid consumer debt
• Invest in financial education
• Take advantage of government and bank incentives
• Learn from mistakes without letting them hold you back

PwC insight

Employees with basic financial knowledge who apply it regularly have a 38% higher savings rate than those who don’t.

Conclusion

Financial goals are not just numbers on paper — they are practical reflections of our life aspirations. By setting clear, realistic, and analytical goals, anyone — regardless of income —can build a secure financial future. The Gulf region today offers both economic opportunities and challenges.

Adopting a proactive financial mindset, starting with simple steps like these, is essential.

Start today — even with a small step. Every major financial goal begins with a clear vision and strong determination.


References

1. Harvard Business Review – Goal Setting Research
2. Coursera – Personal Finance for Beginners
3. PwC Middle East – Financial Wellness Survey
4. World Bank – Arab Consumer Financial Behavior
5. Mawareness.sa – Saudi Ministry of Finance
6. Sawalf Business Podcast
7. Gallup – Financial Behavior Reports
8. Local Financial Apps (Mahfathati – Tharwa – Derayah)
9. McKinsey – Youth Economic Behavior in GCC
10. Forbes Middle East – Financial Planning for Young Arabs
11. Finxar – Smart Goal Tracking App
12. Oxford Business Group – Financial Literacy in the Gulf
13. Cambridge University – Financial Habits Study
14. Saudi Central Bank – Financial Awareness Reports