The World According to Me

In my first post I talked about knowing where you are when it comes to your financial life. I gave you some tools for helping to develop a clear picture of your financial reality, otherwise known as your actual spending budget.

When making a financial plan you also have to know where you want to go. In other words, what is your goal? Do you want to be debt free? Do you want to take a vacation? Do you want to go back to school? Knowing what your goal is will help you make difficult choices to get you from where you are to where you want to be.

The clearer this goal is for you, the easier your decisions will be. If your goal is to get rid of debt, it is a good idea to also set a goal beyond that. Look at how much money you are spending right now to service your debts. That is money you will need a plan for once you have paid off your debt. It may seem like a long way away, but having a goal in mind for your post-debt life will help you make good choices along the way to a debt free life.

If your goal is a material good or a vacation, think of it as a short term goal. If your goal is a trip to Disney World, cut out a picture and stick it on your fridge. Make a chart that tracks your progress to your goal and display it where you will see it often.

Also think about what your goals might be in the future. Once you have paid off debt and satisfied your short term material goals you can think longer term. What are your retirement plans? What kind of support do you want to give to your family? Having long term goals will help keep you on a solid financial path for life.