Everyone has dreams, right? I dream of hiking Mount Everest and swimming 10 miles across the ocean. I said I dream. It will never happen. Why? There are two reasons. One, I am terrified of heights. Second, although I am a good swimmer, I am scared of the deep ocean. So, those dreams won’t happen.
I also have goals for our future. I want to be financially independent and not have to worry of not receiving a check or how we will pay for X or Y. This is our main financial goal. The difference between this goal and my dreams? I can work toward reaching my goal. And I am.
You need to sit down and decide what are your financial dreams.
- Do you want to be debt free?
- Do you want to have a new car every year?
- Do you want to pay for your kids’s college?
- Do you expect them to pay for college themselves?
- Do you want to retire early?
- Do you plan to work until you are in your 90’s?
- Do you want to travel the world?
- Do you want to give to others?
These are some of the questions you should ask yourself when you are setting up your financial goals. Once you determine what your goals, you will be able to set up a plan to reach them. An important step is setting up time frames for yourself.
Is your goal getting out of debt? Start deciding which debt are you paying off first and set up a realistic date on when should that happen. Then get onto the next one on the list. And just keep going.
Do you want to retire early? Start investing as much as you can in Roth IRA’s and your Roth 401K’s. If you maximize both tools, keep investing in mutual fund accounts.
Do you want to pay for your kids’s college? Set up 529 college savings plans as soon as you can for each kid. Discuss your plans with them. Are you planning to pay for all the school expenses? Are expecting them to
Working on these goals will represent sacrifices now but remember that most of these goals are long term and you need to stay focused on the goal. Making changes in your lifestyle now will have rewards when you are able to achieve those goals.
What are your financial goals? Have you set up a plan?