Setting Goals
Identifying clear, achievable goals is a vital part of anyone's financial plan. A financial goal is the exact amount of money needed for a specific purchase or service at a specific date. By defining your goal exactly helps you decide how much you need to set aside each month and track your progress.
The three types of goals are: short, mid and long-range. Short-range goals are to be met in one year or less, mid-range in one to five years, and long-range in five years or more. Vacations, gifts, and small home improvements are typical short-range goals. A down payment for a house is a common mid-range goal. Long-range goals may include saving for retirement and a child's college education.
Making a financial goals chart can help you determine the timeline for your goals and the amount of money you'll need to on a regular basis set aside in order to reach them. You may find the numbers intimidating or even not practical based on your current financial situation. You may be able to increase your income and/or decrease your expenses or have to consider adjusting your goals.