Setting Financial Goals

Deciding how much money to spend or save takes some planning for what you would like to buy and when. When it comes to setting financial goals it helps to make a list of what you would like to have now and in the future along with how much it costs. To figure out how long it will take to get what you want, it helps to consider how much money you make.

According to the FDIC’s Money Smart financial education program, here are some steps for setting short and long term financial goals:

  1. Write down a future purchase you want to save money toward.
  2. Figure out the cost and write it down.
  3. Set dates for when you would like to reach your goal. For a large savings goal that may take a long time to reach, set dates to reach smaller goals along the way.
  4. Write a plan for how you will achieve the goal.
  5. Keep track of your progress every week or month.
  6. If you see you need more time set new dates. You can also save more money or change your savings goal.

For example, if your son wants a new bicycle that costs $200 and he makes $60 mowing lawns each week, it would take him 4 weeks to purchase his new bike. He would have $40 leftover that he could keep in his savings jar until he needed it for something like admission money to a movie with a friend, or he might choose to put it into a long term savings account for something like a future schooling expense or down payment.

It is important to regularly review your plan and evaluate how you are doing. You might want to watch out for advertising or peer pressure that can distract you from your goal. Not that you cannot change your mind, maybe just incorporate it into your plan.  After all, life is all about choices, planning and adjustments, right?

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