If you had to choose between sitting down at your kitchen table to set financial goals or sitting on a beach in the Caribbean, you would most likely choose the beach. But how would you pay for the airfare? Hotel? Food? Souvenirs?
Goal setting may not be exciting or fun, but it helps you save for exciting and fun things. It also helps with things that are important but less exhilarating, such as setting up a retirement fund or a child's education fund. When saving, you could wait and see what is left over at the end of the month after you pay your bills, but because it’s easy to get into the habit of spending what you make, you may find yourself with no savings at all.
Even if you are putting money into your savings account, how do you know if it's enough to get what you want when you want it? By taking the time to think about your goals, how much they cost, when you want to achieve them, and what your regular financial obligations require, you will know exactly how much to save each month. Then, if you see the need, adjust your budget so you can more easily reach your goals and pay your bills.
The first step in achieving your financial goals is to determine what they are. For now, just think about the goals themselves and when you want to achieve them by – don’t worry about the cost at this point. Do you want to buy a new computer in a year? Have a down payment for a house in four years? Be debt free in five years? Once you figure this out, you can calculate how much you will need and divide it by the number of months to discover how much you should set aside each month. How you do this depends on whether it is a short-, mid-, or long-term goal.
When you’re ready to begin to progress toward achieving your financial goals, Sunward can help. Log in to online banking and click on the Savings Goals widget. You only need to know the amount you’d like to save and the date you’d like to reach your goal. The online banking system will tell you how much you need to save each month and will also track your progress. Once your goal is created, you will be able to view it in online banking and the mobile app.
Visit slfcu.org/Balance for free financial resources, including calculators, articles, and videos.
