It is important that when it comes to any area of your life you have a clear financial path. When it comes to your money, you should have a prioritized 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 goals need to be very clearly defined with specific dollar amounts and timeframes. 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.
Achieving short-term goals requires a lot of discipline and it 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 Gary and his team help your prioritize your income, spending and saving!
