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
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
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.
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.
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.
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.