How to set financial goals when entering the workforce for the first time.

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If you’ve just graduated from a university or are entering the workforce for the first time you may have questions about how to manage your money to achieve your financial goals. If so, you’re not alone.

Take the example of Bhavna, who recently graduated from an Australian university. She has received a job offer from a leading professional services firm, and like many of her peers, Bhavna is managing the challenges of savings for her short, medium, and long-term goals. She must pay for her day-to-day expenses and is also saving for a big holiday abroad and to buy her first home.

So, what are financial goals?

Financial goals are the personal, big-picture objectives you set for how you’ll save and spend money. They can be divided into three tiers: short-term goals, medium-term goals, and long-term goals.

Bhavna, for example, could treat putting money away for emergencies, like fixing her washing machine, as her short-term goal, saving for a deposit for her first home as her medium-term goal, and be financially ready to have a secure retirement as her long-term goal. Obviously, your goals will be unique to your personal situation.

Why is financial goal setting important?

Having financial goals will change how you look at your money. Once your financial goals are established, you’ll begin to see how every decision you make matters for your financial wellbeing. With financial goals in place, you’ll be in a better position to focus on your priorities, and this will remain true across all life stages. If you’re a young Australian who has just joined the workforce, it’s important to develop a healthy money mindset. This will help you track your financial situation and ideally increase your financial success in the longer term.

You’ll likely have a combination of short-term, medium-term, and long-term financial goals.

Short-term goals.

What are short-term goals?

Money that can be used for short-term financial goals should be easily accessible and may be best kept in a savings account. Typical examples of short-term financial goals include emergency savings funds, savings for repairs, and payments towards rent or insurance.

How to achieve these short-term goals?

For recent graduates like Bhavna, the first step is to develop good money habits. These habits include having a budget, keeping a spending diary, paying your bills on time and in full, setting financial goals and setting up a goal savings account. This video may be handy if you would like help developing positive financial habits.

Savings accounts may help your money grow faster by offering a higher interest rate than everyday transaction accounts. Depending on your bank, you’ll be able to choose from accounts with different features. For example, a savings account that could reward you with bonus interest, or an online savings account with a great introductory interest rate. Considering Bhavna’s short-term goal of saving for an emergency fund of $1,000 over the next few months, she might consider using a savings account to help achieve this goal.

What to be aware of.

While it may be convenient to hold these savings as cash, this does pose greater risks to the security of the cash, and it doesn't earn interest. Consider keeping this money in a savings account, as the Australian Government guarantee protects deposits in a savings account up to the value of $250,000. This cap applies per person and per Authorised Deposit-taking Institution.

Medium-term goals.

What are medium-term goals?

Medium-term goals, may include saving to pay down HECS, saving for a property or home deposit, or saving for major expenses like travelling overseas or buying a new car.

In Bhavna’s situation, she may be interested in purchasing an apartment, which will require her to save for a 20% deposit. This means she will avoid Lenders’ Mortgage Insurance and have money to pay for a number of other upfront costs including stamp duty, government fees, registration fees for changes to the Lands Titles register, home loan establishment, building inspection fees and legal fees. If like Bhavna your goal is to buy your first home, here’s some tips that savvy first home buyers might like to consider.

How to achieve these medium-term goals?

Putting money into your savings accounts is of course a key consideration to save for your home loan deposit. A focussed plan can help you save for a home loan deposit for your first property. This article shares how you can save a deposit for your first home.

You may also be eligible to receive a grant from the government to help turn your first home dream into a reality. We’ve outlined the help available to first home buyers in our article: Tips for first home buyers to be ready to buy.

What to be aware of.

Purchasers will usually need save 20% of the property’s value as a deposit. Try this Home Saver Calculator, to see how long it could take to save for a deposit.

Paying Lenders’ Mortgage Insurance may help reduce the amount you need to save for a deposit. Learn about Lenders’ Mortgage Insurance in this video.

Long-term goals.

What are long-term goals?

Long-term goals are about people's long-term financial security, such as having sufficient income to retire comfortably. In fact, the biggest long-term financial goal for most people is indeed saving enough money to retire. Savings for long-term goals are typically more difficult to access. For example, superannuation takes decades of investments and the accumulation of wealth and can only be accessed when certain eligibility criteria have been reached.

How to achieve these long-term goals?

Australian residents, like Bhavna, enjoy the advantages of the Australia’s retirement income policies including Superannuation Guarantee, and Voluntary Retirement Savings.

  • Superannuation Guarantee. If you’re 18 years old (or under 18 years old and work over 30 hours a week), then your employer must pay a superannuation guarantee (SG) rate of a minimum of 10.5% (due to rise to 11% after 1 July 2023 and set to increase gradually up to 12% by 1 July 2025), of your Ordinary Time Earnings into a super fund of your choice.
  • Voluntary retirement savings provides incentives for individuals to have supplementary savings for retirement either inside or outside the superannuation system. Bhavna could choose to put additional money into her super account as one example.

What to be aware of.

Investment returns are never certain. Rather than choosing between high-risk and low-risk investments, many investors simply diversify their portfolios with a mix of both.

Superannuation funds invest money based on the investment choices you make to help it grow, so that you can achieve the retirement you want. 

Your superannuation is typically considered a long-term investment, specifically designed to help you save for retirement. Some key things to consider are:

  • The magic of compounding. Superannuation is generally locked away for decades and with regular contributions via SG payments (made by your employer), or personal contributions, it becomes a great investment vehicle to take advantage of the magic of compounding. Learn more about how compound interest works in this video.
  • Tax benefits. Money in super is taxed at a concessional rate of 15%. This can mean more of your money goes towards your retirement than if you were to invest outside of super. The concessional rate could apply to contributions made into your super, as well as to earnings that are generated by investments in your super. This is potentially lower than the personal tax you would pay on your income.
  • Diversifying your savings for retirement. When you diversify your investments, it means you’re not placing all your eggs in one basket. This is important because super often forms a substantial portion of your retirement savings.

This video will guide you through some of the key financial considerations to get you started on planning your finances for retirement.

Committing to saving for your goals.

Once you’ve planned out your financial goals, you then need a savings strategy to help you realise them. Saving for your financial goals should be a habit, rather than a chore. Each item in your budget has an impact, and all your financial goals are tied to your spending habits. Discover our good spending habits and 7 tips for saving videos to help you become financially fit and achieve your savings goals.

Other resources.

  • To learn more about how to establish savings goals, read here.


*Bhavna is a fictional character whose story is based on real life experiences of many people.

This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice. ©Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.


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Lali Wiratunga

Lali Wiratunga believes in encouraging positive financial behaviours to boost people’s financial confidence and help organisations to deliver social impact. In 2016, Lali was recognised for creating a positive impact through Pro Bono Australia’s Impact 25. Following a career as a corporate lawyer and management consultant in the UK, he's had 17 years experience in roles across financial services in Australia. He serves in the community as a Board Director of Plate it Forward, a food-based social enterprise that drives equal opportunity through creating opportunities to employ, train and educate individuals who might otherwise be prevented from entering the workforce.

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