Setting Financial Goals: First Dream, Then Plan


APRIL, 2018
AK Equity Group
Your goals are meaningful. Your financial plan should be made to fit your goals, not the other way around.
When investing, begin by clarifying what your personal financial goals are. Then, you’ll be better able to develop a financial plan that truly helps you get there.

Whether your dreams include spending more time with family, planning for a major life event such as a wedding, or learning to fly a plane- you’ll need a plan to create the financial resources to make your dream a reality.


Clarify Your Goals

First, define your personal goals using these 3 simple steps. Tip: It helps to write these goals down.

1. Identify Your Goals

Are you saving for retirement? Funding your children’s higher education? Building up a down payment for a house?

2. Assign A Dollar Amount For Each Goal

Setting an estimate amount on each goal will help you prioritize your goals and create a realistic time frame for achieving them.

3. Set a Time Frame To Reach Your Goal

You likely have a mix of short-term (2 years or less), medium-term (3-5 years) and long-term (6 years or more) goals.


Prioritize Your Goals

Is it the right time to start building towards your goal? Wise financial planning sets these 3 savings milestones as top priority:
1. Save For Retirement

If you haven’t started saving for retirement yet, you’ll want to start with this one. Although retirement may seem a long way off, it’s best to start building for retirement now, either through your employer or on your own.

Sound retirement planning today means making the most of your retirement years to come.
2. Pay Off Debt

Next, pay down any consumer debt you might be carrying. Consumer debt, such as credit card debt, often comes with a higher interest rate. It can cost you in the short-term and in the long-term as well, if it’s not dealt with as soon as possible.

3. Build An Emergency Fund

Now that you are regularly saving for retirement and have paid off any outstanding consumer debt, you’re ready to build up an emergency fund. An emergency fund typically covers 3 to 6 months of living expenses, at minimum.  This fund will protect you from the unexpected.

Investing can help you reach your goal faster. For starters, when you set aside money into a separate investing account, this keeps you from spending it and ensures your money continues to work towards your goal. Secondly, investment offers the opportunity to help you achieve your goal amount faster than if your money is simply saved in a bank account.

Saving for a financial goal is exciting! And when you start by clarifying your goals, you’ll be well on your way to developing a financial plan that will help you get there.