It is important that when it comes to your life you have a clear financial path. When it comes to your financial planning, you should have an agenda with clear goals. A lot of people, commercials and companies will talk about your retirement or college savings accounts. But what about short-term financial goals? Every day we make decisions that impact our finances. Our short-term goals add up to the long-term goals!
Short Term Financial Planning
Short-term goals need to be very clearly defined with specific dollar amounts and time frames. And, if you have more than one goal, you need to assign an order of importance to them. Some of these goals are steps toward something life-changing like having a baby, buying a home or saving for college. Sometimes these goals may be for something fun – a boat, a vacation or a birthday present. Either way structuring your financial lives knowing where every bit of your money is going is important.
Be serious about your budget. You may already have a budget, or this may be the time to build one. Once you commit to your goals, you will need to create a budget around your goals, not your spending. As you begin allocating cash flow to your budget items, plug in your goal commitments first, then allocate your remaining income to your spending categories. This is where you take the red pencil and start cutting so that your ending cash flow balance is either zero or positive.
Long Term Financial Planning
Achieving short-term goals requires a lot of discipline. Those who do well with it achieve what they want in the long term as well! Saving and budgeting can put a lot of pressure on your finances. As with any major undertaking, it is often easier to break a project down into smaller increments. Setting smaller, more frequent benchmarks or steps can be more attainable, and it helps to keep you on track. Let Jay and his team help your prioritize your income, spending and saving!