What is a common purpose for setting financial goals?

Setting financial goals is primarily focused on enhancing financial stability and security. This involves creating a roadmap that can help individuals or families manage their finances effectively, plan for future needs, and build a secure financial foundation. When people establish clear financial goals—such as saving for emergencies, retirement, or major purchases—they are more likely to make informed decisions about their spending, investing, and saving.

In contrast, reducing income, increasing fixed expenses, or relying solely on credit would typically lead to greater financial strain and insecurity. Reducing income may limit the ability to achieve desired financial outcomes, while increasing fixed expenses can reduce flexibility in budgeting. Relying only on credit often leads to debt accumulation, which can undermine financial stability. Thus, the common purpose of setting financial goals is aimed at fostering a sense of financial security and the ability to achieve long-term aspirations.