Defining and setting goals for a good financial life
Defining your financial goals can be difficult as they will most likely change over time. The following are examples that may get you started:
- Owning and living in a nice home.
- Being able to afford to travel and take nice vacations.
- Saving enough to have a financially secure retirement.
- Paying less in income tax.
- Earning more on investments.
- Being able to afford college educations for children.
- Having assets that can be passed on to heirs.
These are relatively concrete concepts, the costs of which can be determined with a calculator and some assumptions.
But there is more to a good financial life than just long-term, concrete goals that can be calculated. There are short-term and intermediate-term goals that should be taken into account as well.
- Being able to live comfortably in a safe neighborhood, whether the home is rented or owned.
- Driving a reliable car.
- Being able to afford gifts for friends and loved ones.
- Taking nice, but not extravagant vacations.
- Accumulating some net worth.
- Getting out of debt.
- Starting the process of saving for retirement and college educations.
There are also intangibles that should be considered
- Peace of mind that comes with a feeling of being in control of your finances.
- Handling finances without too much stress.
- Feeling that you are making progress toward your long-term goals.
- Not worrying about money.
- Not spending too much time and effort handling your finances.
- Knowing you are doing the right things financially and not making mistakes.
The benefits of patience and time
All of these things can be within your reach, but each of them takes effort. The key is to start early, learn as you go, make fully informed decisions, avoid major mistakes and balance all your goals.
Learning to manage your finances intelligently can be different than learning most skills. Learning to ride a bicycle is relatively simple - you get on, you balance yourself, you pedal, you turn and you break. There are very few variables.
With your finances, there are many variables and those variables change over time. You have different jobs and income levels, your expenses change and there can be unexpected expenses, certainly the investment markets fluctuate, the tax rules change and your goals change. Some of these changes you can control and others are beyond your control.
We all tend to want immediate gratification and to believe we are in control of all aspects of our lives. Achieving financial goals, whether they are long-term, short-term, or intangible requires that we make decisions that balance short-term and long-term priorities.
We can help
For help in mapping out your financial future, visit one of our branches or call us at 1-800-288-3425.
Financial Wellness 101:
- The importance of saving
- Preparing your first budget
- Defining and setting goals for a good financial life
- Home renovation mistakes: how-not-to
- Monitor your financial identity by reviewing your credit report
- Live prepared: get these 25 key papers in order
- Could your family make it on one income?
- Build yourself a safety net with emergency savings
- 8 things to buy used
- Annual financial check up
- Have a financial strategy