Financial goal

A 3-Step Strategy to Reach Any Financial Goal

There is a classic dilemma at the heart of every financial plan: Do you live for today or save for the future?

The conservative and prudent advice is to live on a modest budget today so you have plenty of assets in reserve for future needs, especially after you retire. Commonly accepted wisdom seems to be that you should pinch pennies today in order to enjoy yourself down the road.

However, there’s also the very natural and understandable desire to live for today. There are likely things you want to do in life that would be best enjoyed while you’re young instead of waiting until retirement, when health considerations may get in the way. Also, given the unpredictability of life, there’s no guarantee that you will be able to tick items off your bucket list when you’re older.

So how do you enjoy life to the fullest while also preparing for the future? The good news is that with discipline, focus and planning, you don’t have to choose between the two. You can save for retirement and enjoy life today! Below is a simple three-step process to help you plan for today’s big goals and save for tomorrow’s:

1.) Estimate the cost of your goal.

Whether your goal is to retire in 20 years or take an exotic vacation next summer, the first step is always to analyze your dream and estimate a price tag. You can’t develop a plan until you know exactly what your target should be.

Sit down and estimate all the costs, and then develop a total budget. For a long-term goal like retirement, it might be difficult to estimate your expenses with precision. However, even a ballpark estimate is better than no estimate at all. (You may also want to consult with a qualified financial planner who has the tools to help you with some of these calculations, and can also help you put together a game plan to properly save in the right “buckets” for a secure and comfortable retirement.)

2.) Break it into smaller, manageable goals.

With an approximate price tag in mind, you can then break the cost down into more manageable short-term goals. For example, your goal of a vacation next year can be divided into smaller monthly savings targets. Your retirement savings goal or your child’s college tuition can be divided into annual or even monthly savings hurdles.

It’s often difficult to mentally track progress toward a big, long-term goal. However, it’s not as challenging to measure your progress against smaller, more incremental targets. By breaking down your goal into more manageable pieces, you can stay on track and stay focused.

3.) Stick to your plan.

Of course, all the planning in the world won’t guarantee success unless you follow through – which for some people, can be the hardest part. Develop a plan to hit your short-term savings targets so you stay on track to meet your long-term goal.

Look at your spending to identify areas where you may be able to cut back. Also, consider making your savings automatic. You could set up automatic contributions or transfers directly from your paycheck or bank account. By automating your savings, you may eliminate the temptation to use that money for other purposes.

The key to achieving any financial goal, whether it’s long-term or short-term, is to develop a plan and implement it. This three-step process is basic and simple, but it’s also effective enough to help you achieve any item on your bucket list.

Ready to develop your plan? Let’s talk about it! Contact us today and we can help you analyze your most important short and long-term financial goals and create a strategy to achieve them.

 

Disclaimer:

This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

Leave a Reply