| Setting Financial Goals

Setting Financial Goals


Why should you be setting financial goals?

In everyday life you run across money situations. In order to survive, you need to spend money. If you don’t have any money to spend, you can’t survive, or at least not without handouts. You definitely can’t live comfortably. How do you make sure that you have the money to buy the things you want and need?

You need to organize your money, but in order to pay for the big things in life you need set goals to save for them. When you set a goal, you have given yourself something to work towards. If you know you will need to have money to buy a house in five years, setting a goal will give you time to save that money and it will also give you the drive to do so.  It will bring you to financial freedom.

What kind of financial goals should you set?

There are tons of different types of goals you could possibly set. You will usually have several. The biggest goal of all that everyone should set is retirement. You don’t want to work forever, but in order to stop at some point, you will need to have money stashed away.

Some other common goals include:

- Buying a car

- Buying a house

- Sending the kids to college

- Paying off debt

- Setting up an emergency fund

These are all long term goals, except maybe paying off debt which could be either long or short term. An example of a short term goal would be to buy a cheaper item such as a computer or television, paying for a home improvement, paying back a small sum of money to a relative, etc.

How do you save the money to meet your goals?

In order to save the money to pay off debts and pay for future items, you need to control your spending. The overall goal is to spend less money than you earn. Many people have a lot of trouble doing this and that is why they end up in debt.

The best way to control your spending is to set up a budget. Plan out how much many you will allow yourself to spend on bills, food, fun activities, clothes, etc. By sticking to a budget, you will not overspend and you will be able to save the money you need.

Where should you be putting the money that you save?

If you are paying off debt, then of course you will be paying off the creditors. If you are saving for retirement, kid’s college, or other very long term goals, you should maximize your earning power by putting the money into the stock market through retirement accounts such as a 401K or IRA, or a college savings plan such as a 529 savings plan.

If you are saving for items in the near future such as a house down-payment or a car or you are building an emergency, you should put the money into a high interest savings account. I use ING Direct an online savings account. They have one the highest interest rates, much higher than any neighborhood bank, they are safe, and they are very fast and easy to use. I highly recommend signing up for free today. You don’t have to pay any transaction fees or inactivity fees. You can even organize your account by using multiple accounts for different savings goals. Sign up today for ING Direct!

How will you stick to your goals?

Sticking to your goals will take self-discipline. You have to really want to succeed in order to achieve your financial goals. Write them down and read them over frequently. Continue to check your progress on a regular basis. This is a key step in achieving your goals, to stick with it!

To help you keep your goals organized, you should have more money and financial accounts managed efficiently. A great way to do this absolutely free is with Quickens free Online Program. You can keep all your savings, investments, and banking accounts in one place and track your spending. Sign up now to get started.

How will you feel when you achieve your goals?

I can’t describe to you how it feels to achieve a goal because it is different for every person. I will tell you that it is a great feeling. Accomplishing anything is a success and you will feel even better when you are able to buy a car or house, or you are able to live a comfortable, fulfilling retirement.

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