What do you want from your money? A down payment on a house, a new car, a comfortable retirement? While this question may seem basic, it can be the starting point of good money management.
If you don’t know where you’re going, how can you plan to get there? So before you get into the details of saving, budgeting and investing, take time to think about what’s most important to you and what you want your money to achieve.
Make your goals real by writing them down.
If you write down your goals, you’re more likely to achieve them. Think of them as a road map to where you want to go—and make them practical and attainable.
Here’s a simple two-step approach:
- Divide your goals into three categories: short term (less than one year); medium term (one to five years) and long term (more than five years).
- Attach a dollar amount to each goal. For instance, a short-term goal might be a family vacation. How much will it cost? The more specific you can be, the more motivated you’ll be to work toward that goal.
- Start saving and tracking your progress toward your goals.
NOTE: Be sure to track your progress regularly. It can be really gratifying to watch firsthand how savings can accumulate toward a goal.