Financial Goals – All About YOU

Posted by Katie on May 30, 2012 in Saving, Uncategorized | 5 comments

I remember graduating from college, ready to take on the world. I got my first ‘real job’, moved out of my parents (for good) – I was taking care of myself. Then suddenly a little topic called ‘financial planning’ came up. I was side swiped, what do you mean financial planning? Like for retirement? Ever since I’ve been trying to figure out what exactly I’m ‘supposed’ to be doing.

I’d hear people talk about things like having multiple savings accounts, setting up various short-term/long-term goals. What goals are people trying to reach? And why do you need so many accounts? I decided to start saving random amounts of my paycheck; something was better than nothing right?

It wasn’t until I attended a webinar recently on ‘how to build a better budget’ that I finally understood what ‘everyone else was doing.’

Hosted by Balance – a FREE benefit of Apple membership (shameless plug, but check out AppleFCU.org/BALANCE; see ‘10 Steps to Financial Freedom’ within BalanceTrack Info Center), we were given some worksheets to help calculate our goals.

On this sheet they have it split up between Short-term (under 1 year), Mid-term (1-5 years) and Long-term (over 5 years) goals. At first glance I felt overwhelmed. What major events do I have coming up in life that I should list as a goal…Retirement?  Buying a house? Luckily, the webinar began before I could have a full-fledged panic attack over future life events.

 Here are a few tips I got from the webinar:

• How to calculate the amount to set aside (for short to mid-term goals): Take the cost minus the amount you have saved so far divided by the number of months you have to save.
  Example: The computer you want is $800, and you would like it in six months. You haven’t saved anything yet. To reach this goal, you will need to set aside $133 per month ($800/6=$133).
• Create goals for YOU: I thought “each goal has to be monumental because that’s the type of things people plan for.” Wrong. Sure, there are some big long-term goals I listed like retirement, but what about now? We were asked in the webinar if we planned on holiday shopping this year and have we started saving money for that? The light bulb went off and I realized I need to create goals for myself and what I want in life.
• Make your goals realistic: I’m the first to admit when I want something; I want it an hour ago. The idea of planning for something years from now is a bit overwhelming. DON’T GET DISCOURAGED! I look at it like this, I can save for an extended period of time and eventually get that item or go on that trip, OR, I can decide saving will take too long, so I don’t save, and I’ll never get that item or go on that trip, I’ll just continue to wish I had money to do so.
  Example: I’ve wanted invisalign for a while (side note: if you get braces, wear your retainers like your mom tells you, I learned this the hard way). When I look at the price tag, there’s no way I can afford it. So, I wrote it down as a goal and said I’d like to get invisalign in 1 year. I was shocked! I calculated how much I need to set aside each month; it came out to a smaller very manageable amount. Now, in a year I’ll be making my first appointment!
• Set up automatic payments/transfers: I bought my first car last July and set up my car payment to automatically come out of every paycheck, on pay day. This worked so well for me I decided to have a portion of my paycheck placed into savings. If I never ‘see’ that money, I know it’s being used and not available. I’m left with my ‘new paycheck.’ This has helped me stay on track with my goals because I’m not tempted to spend the money elsewhere.
• Write your goals down: I took a morning to map out my goals, filled out the sheet (shown above) and placed it on the wall of my office at home. Before I had a plan, I would take money out of savings as needed because what was I really saving for? Now, I’m constantly reminded of what I’m working towards.

While the task of filling out the sheet and mapping out my goals seemed daunting, I look back and realize how important it is. The biggest piece of advice I can offer is don’t get overwhelmed. Take a deep breath and remind yourself at the end of all this planning you’re going to reach some pretty incredible goals.