Before starting down any financial path, you need to decide what your goal is. Maybe it’s paying off your student loans. Or perhaps it’s starting an emergency savings account. You may even be thinking about that dream vacation. What about all three?
Goals are the foundation to any financial planning. They determine how you decide to save and spend your money when it comes to budgeting. Your goals should be reflective of your future financial needs both as an individual and as a family.
A good way to start your planning is organizing your goals by short-term, mid-term, and long-term.
Examples of Short-Term Goals (6 months to 2 Years)
- Tackle Debt
- Create Emergency Savings
- Adjust Spending Habits
Examples of Mid-Term Goals (2 to 5 years)
- Save for a Home Down Payment
- Adding to a Vacation Fund
- Starting a Business
Examples of Long-Term Goals (More Than 5 Years)
- Plan Retirement
- Build College Funds
If you are married, you and your spouse need to be on the same page when it comes to your goals. Try to sit down together at least once a month to go over your finances and see how you’re doing.
Remember to keep your goals positive, specific, and, most importantly, attainable. Constantly remind yourself of these goals every time you have to make a financial related decision. It may even help to write your goals down and place them where you will see them on a daily basis. Be as detailed as possible in your plan to reach your end game and reward yourself along the way.
Setbacks may happen, but don't let that discourage you. Life is constantly changing and your goals maybe affected by that but keep on going.
"I think goals should never be easy, they should force you to work, even if they are uncomfortable at the time."
- Michael Phelps
Come back next month for a new money work-out to help get your finances in shape this year.