By now, you should be on the right track to a healthy financial life. Part one in our series advised you on how to detox your budget, while part two explained how to get your credit in shape. Now, in part three, we’re moving on to proactive financial health by setting financial goals.
What are financial goals? They are both short-term and long-term objectives that require good money management to achieve.
Achieving most financial goals is like running a marathon. It takes a long time and persistence to get where you want to go. All the more reason to start today!
Here’s a list of financial goals you should be planning for, along with tips on how to reach them.
If you’re just starting to get used to a financially fit life, begin by taking on a short-term goal. Once you complete it, you’ll have more confidence in achieving some of the more advanced goals in this list.
This could be the smartest thing you do for your financial health in the short term, because paying interest is like wasting money.
Perhaps you’ve always wanted to go to Ireland, or maybe you imagine yourself traipsing through Alaska. That dream vacation is attainable with the right planning.
You’ve probably heard you should have at least three months’ worth of expenses put away in case of an emergency. That’s a conservative estimate.
This may not be on your radar as a financial goal, but if you don’t have a will in place, your money may not go where you want it to. It takes just a couple of hours to do, and it will give your family financial security in the long term.
Depending on the vehicle you want, this may be a long-term goal. Since we don’t typically know when our car will take its last trip, it’s important to begin saving for a vehicle before you need one.
This could also be a short-term goal depending on how much you plan on spending. There are many first-time homeowner mortgages you can qualify for to bring down the initial cost of a loan, and the sooner you stop throwing money away on rent, the better off your finances will be. PSECU has a consumer-friendly first-time homeowner mortgage program. No minimum down payment and no Private Mortgage Insurance (PMI) are two program highlights.
You should be saving for retirement not at age 40 or 50, but from the moment you take your first job. Save with a purpose – figure out how much you need for a comfortable retirement and work hard to put that money away, even if it means more penny-pinching in the moment. How to do it:
Check out step five in this money management plan to see just how much more money you could get when you invest in a tax-deferred, contribution-matched, employer-provided retirement account.
Some parents assume they can’t pay for college and don’t see the point in saving for it. But there are many programs that can help you save and maximize the dollars you put away, putting a significant dent in the loans your kids will need.
Setting the right financial goals should be part of your long-term planning. People change, and you may find that the motorcycle you once pined for has taken a back seat to some home renovations. Don’t be afraid of changing your savings goals to match your desires.
Set a certain day each year, such as Tax Day or New Year’s Day, to revisit the prior year’s goals and see if they’re still the same for you and your family.
Following these tips can help you achieve your financial goals. Focus on the rewards you’ll reap when you handle your money responsibly.
We’ve now concluded our three-part series on how to get financially fit. To keep on track, click on the link below for a deeper dive into how to effectively manage your finances. Find more money management tips and resources on our Resource Center page.
FINANCIAL HEALTH PART 4: Organize Your Finances Like a Pro