Just like any good goal setting, it helps to have short-, mid- and long term financial goals. This set of seven goals takes that into account, so you can realize financial success both quickly and on a sustained course.
- Create a budget.
- Build an emergency fund.
- Pay off credit card debt.
- Invest in life insurance and disability income coverage.
- Make important home improvements to protect your investment.
- Pay off student loans.
- Plan for retirement.
Short Term Goals
Good short-term financial goals can give you that almost-instant gratification, validating that you are on the right path. Early success can make it easier to stay on track.
When you are looking to chart your way to financial success, just like any good road trip, it helps to have a route planned out ahead of time. Formulating a budget allows you to do just that.
Once you have a budget in place, you can start putting together an emergency fund. This is a good short-term goal because you never know when an emergency may strike. Having between $500 to $1000 in reserve helps you stick to your budget even when there are unplanned major expenses.
Paying off credit cards is another great early "win." As you knock each card off, those quick successes will help train you for better financial independence.
Mid Term Goals
Once you get a few good short-term goals under your belt, it's time to set your sights a little farther out. Short-term financial successes are great, but the path to true financial independence comes into better focus as we set our sights on the future.
Life insurance and disability income should be a mid-term goal of anyone who currently has a family or is planning for one. There are many different types of insurance out there, but term life is typically the least complicated and most affordable.
Getting rid of your student loan debt is another good goal to have. It's amazing how much of a drag student loan payments can be on your monthly budget.
By the time you've handled most of your mid-term goals, it is time to start planning on making those long term financial goals. This is where all that hard work and financial discipline continues to pay off. Is it a vacation home, or maybe an expansion to your current home? The last mid-term goal is to start planning to make it a reality.
Long Term Goals
While long term financial goals can look very different for everybody, the general goal is the same - have enough for retirement.
Formulating a plan for retirement looks very much like the short-term goals, just in reverse. Long-term retirement planning involves estimating how much you are going to need in retirement, and then working backward to decide how much you need to put away now to make that vision a reality.
Once you have the answers to those questions, you can increase your retirement savings to match.
Over the course of your life, you'll have ups and downs, booms and busts. But it's important to stay on the path you have charted for you and your family. For help developing that road map, contact our office today and start solidifying your short, mid, and long term financial goals.