This is my first official post in the “Budgeting 101” series I told you about last Friday, and I’m super duper uper excited, because like I said it’s one of my passions (yeah, I know, another one)! So, today we are going to be starting off with something super easy and fun, defining our financial goals. Then I will be lacing up my boots to kick you in the hiney next week, when we will be discussing actually creating budgets and how to stick to them, so be keeping your eyes peeled (or subscribe to my blog via email on the right, so you don’t have to).
A lot of people never think of where their money goes or what they want to do with it. This causes so much of it to be wasted on meaningless non-beneficial junk (a.k.a. your future yard sale inventory), or other unnecessary things, like paying someone else to do something you easily could have done (“hey, umm, can you come kill this cockroach? I’ll pay you five bucks.”). You work hard for your money, you should be using it in a beneficial way, not to just barely scrape by. Your budget is your ultimate tool for attaining your goals. I am an avid budgeter. I make them for fun, I make them for my friends, I make them for all the different scenarios I could be in, and I make the same ones over and over again (I’m weird like that). Did I mention I like making budgets?
So the FIRST STEP we are going to start with for making out a budget and becoming financial beasts is deciding on your financial goals. Having a specific goal you are working towards makes it much easier to stick to a budget. Ask yourself: what do you want to do with your money? What are your big financial goals for right now and in the future? Do you want to save for a house? Do you want to be debt free? Do you want to save for retirement? Do you want to travel to Antartica? Do you want to have cosmetic surgery to add an extra toe? List out all of your financial goals, and figure out what your goal amount is for each (i.e. $500 per month for retirement). I’m not saying you will have the funds to do each, but you can either A. slowly but surely work towards them or B. find a way to create more money in your budget. If you are not sure what your financial goals are, then you can refer to the list below for some ideas.
- Conquering Debt: If you are up to your eyeballs in debt, then this would be a good financial goal for you, and if you want my opinion (hopefully you do since you’re reading this) it should be one of your top financial goals. Debt makes you feel like a slave, and it also ties up money that could be used for other things. Luckily for you, I will be doing a post on how to conquer debt in a couple of weeks.
- Building an Emergency Fund: Unless you already have one, this should be on everyone’s financial goal list. It’s there for you if you lose your job, your transmission goes out, or Bubbles the cat dies, and you want to give him a proper funeral. Think about not having to stress when something unexpected happens. Ahhh, pure bliss…
- Traveling: Are there any particular places you really want to travel to? I’m not saying list out every single place you want to go, but just the ones you want to go to in the near future. The top two places on my list right now are London and Alaska.
- Saving for Assets: Things on this list would include saving for a car, a house, or maybe that extra toe you’ve always wanted. It’s much better to put them as financial goals now to save for and buy in the future, than to just buy what you want when you want it, getting yourself into debt, and tying up your finances. It’s called debt prevention.
- Saving for Retirement: If you are not saving for retirement, put this on your goal list! Even a little bit is better than nothing. It’s the responsible thing to do, so you won’t force your children to take care of you, or if your children aren’t very nice, so you won’t have to live under a box eating bugs, because you are too old and decrepit to work and feed yourself.
- Saving for College: Most people want to go to college, and earn an education (or they want their kids to), and this ends up starting out many people young and in debt. Boo! There are savings plans that you can set up for your kid’s college fund as soon as they are born. If you have to pay for college yourself, and you want to be an adventure traveling archeologist like Indiana Jones, then put it on your goal list! Figure out how many classes you can afford to take now, or figure out how much you can save for future educational endeavors.
- Giving/Charity: Maybe you want to help find the cure for cancer. Or help poor little children with no family. Or maybe those animal commercials with Sarah McLaughlin really get to you. Or maybe you don’t give as much to God as you would like. These sorts of things only get fixed by people willing to think beyond themselves.
Maybe you can’t afford to do all the things you want to, but you will at least know what to work towards. This step is definitely the fun part, creating the vision, but beware, because next week is when the real work begins. See you soon…or I guess technically not…