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Tips for setting your own financial goals

Financial planning involves many strategies.  Buying a house, saving for a child’s education, retirement planning, and annual holidays involve financial planning. Money is the key component of the many aspects of financial planning.

Write down your goals and dreams on a piece of paper to get started on setting your personal financial goals.  Divide your list into realistic goals; then be specific for short term and long term goals.  If you have a spouse or family, compile your list together.  The purpose is to set goals to allow you to reach your destination. 

Estimate the cost of achieving your goals.  How much do you need to set aside each month to reach your goal?  Make it realistic. 

If your number 1 goal is to save for a down payment for a house, then focus on that goal.  Tackle each goal one goal at a time. 

Your written list serves as a guide to help you achieve your goals.  Personal goals can change.  Revisit your list once or twice a year as your life changes and priorities may need adjusting.

The way to start building wealth is to save and regularly invest a portion of your earned income.  The more savings you have to invest, and the longer the investment time frame, the greater your net worth will be.

Gain control of your savings and expenses with a personal or family budget.  Take a period of time, example a 30 day period, and record every $ you spend.  You will soon realize that you spend money without even realizing it.  List your net income received, and the amount paid out for the necessities of life, mortgage or rent, utilities, groceries and entertainment.  How much money is left over at the end of each month to reach your goals?

There are so many temptations that consumers think of as “need to have basics”, that can quickly consume your hard earned money.  Cell phones, cable television, take out food or restaurant meals may all be considered necessary expenditures by consumers, but are they necessary?

There are so many ways consumers spend unnecessary money.  Using an ATM to withdraw $20 can cost you $2 per transaction.  That is an expensive way to access your own money. 

As you idle your car, wasting gasoline, while waiting in a long line up at Starbucks or Tim Horton’s, to pick up coffee (you can make at home) can cost you hundreds of dollars per month.  Think of little ways you may be wasting your own money. 

It may be necessary to make lifestyle changes to reach some of your financial goals.  If your goal is to accumulate enough money for a house down payment then you may decide not to purchase take out coffee or lunch on a daily basis.  Brown bagging is easy on your pocket book and easy on your waistline.

Are there any ways you can find to reduce your spending? Can you save 10% of your income to pay yourself.  The balance is then used to pay off the monthly necessary fixed costs.  Pay yourself first.

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Doreen Smith is a Certified Financial Planner with Capri Wealth Management Inc. Doreen can be reached at 250-869-3825. www.DoreenSmithCFP.com.