Goldman (born August 12, 1931) grew up in a Jewish family in the Chicago suburb of Highland Park, Illinois, the son of Marion (née Weil) and Maurice Clarence Goldman, who worked in business. He obtained a Bachelor of Arts degree from Oberlin College in 1952 then went into the army. He knew how to type, so was sent to the Pentagon where he worked as a clerk until discharged with the rank of corporal in September 1954. He then went to Columbia University where he graduated with a Master of Arts degree in 1956. All this time he wrote short stories in the evenings, but struggled to get them published.
He and his brother James, the playwright, shared an apartment with their friend John Kander (also Oberlin and Columbia MA) and helped out Kander, a composer, by writing the libretto for his dissertation. All three later won separate Academy Awards. (Kander was the composer of Cabaret, Chicago and a dozen other famous musicals.) Goldman lives in a penthouse apartment in New York City. His brother, James Goldman, who died in 1998, was a playwright and screenwriter.