With so much fun to be had in present-day saving can seem pointless. There is an old argument that when you are young you have time, are fit but have no money. When you are middle-aged you are fit, have money but no time and when you are old you are no longer fit but have time and money. It appears at every stage of life we are losing out on really enjoying ourselves. The truth is somewhat different. If you properly plan for things you want to do you can achieve them all. Setting financial goals is the key to success.
While you may have a little bit of savings today and are already thinking of upgrading your car, think twice. If the car you have currently is ticking all the boxes then do you really need a bright and shiny new motor? Before you spend all your hard-earned savings it is a good idea to sit down and plan your financial goals. Everyone should have financial goals in the short-term, medium-term and long-term.
Short-term goals should focus on the weeks, months and the year ahead. It should include paying off your credit card debts and setting aside an emergency fund. It may also include a nice holiday for you and your partner as well.
Medium-term goals should look a little further ahead in the 2-5 year window. If you have any debts you should be trying to pay them all off within the next 5 years. You should also start to think about family and how you want to live. Perhaps it is time to focus on a down payment for a mortgage or maybe you will need a bigger car if you have a child on the way.
Long term goals should consider how you want to retire, how you want to live your whole life and what kind of family you are planning. If you want to have three kids then you need to think about their college fees, even if it is twenty years away.
If you can set out your goals now it will stop you from wasting money in the short term on things you don’t need. Proper financial planning is the easiest and most important step to success.
