Is getting your financial house in order important to you? Today, every working American needs to plan ahead for personal and financial security. And more than anything else, this requires that you take control of your finances today. Being adequately prepared to meet whatever financial challenges come your way may be more important than you think.
Setting Financial Goals
Before you can set specific goals, you need to know where you stand. Your financial goals could be your road map to a lifetime of financial security. Effective goals are specific and measurable. After all, if you have no way of measuring your goal, it will be difficult to tell if you ever reach it. Effective goals have a realistic deadline. This enables you to determine the pace at which you want to pursue your goals, and it allows a financial professionals to work with you on establishing a specific plan that can help you be financially prepared.
Some goals are money oriented. It takes dollars to purchase a home, pay for vacations, accumulate money for a college education, and generate retirement income. Other goals may be task oriented, such as making sure you have designated beneficiaries for your retirement plan assets.
Getting a grip on income and spending is one of the fundamentals of financial management that few people actually enjoy. Yet by showing you the big picture, a budget can help you set spending guidelines and limits that clarify your priorities, and find ways to set aside money in the pursuit of your specific goals.
The $140,000 Latte
Are there any discretionary items you spend money on that you could eliminate, or reduce the purchase of, to free up money for your future? Here is an example of how small discretionary expenses can add up over time, and how you can turn it around if you have the discipline to save and invest consistently.
I like to drink coffee and have a habit of purchasing two lattes per day at cost of $4.00 each. This works out to be at a cost of $176.00 per month. If instead I invested that $176.00 per month in an account earning 8% annual rate of return, I would be able to accumulate more than $140,000 in 25 years.
Someone once said “Whether you are rich or poor, it’s nice to have money. Taking control of your finances are essential in your ability ensure a more comfortable financial future. There are strategies that can help you overcome these challenges and become more empowered to take control of your financial future. Contact me if you would like to get more information on ways to help get your financial house in order.
James De La Torre has conducted federal benefit and financial planning seminars in all of the country. He is a keynote speaker at federal conferences and works with federal professional organizations on ways to improve the communication of federal benefits to their membership. Jim has appeared as a guest on “Fed Talk” on the Federal News Radio network, discussing the gaps in federal benefits and the financial impacts employees face. Jim holds a Charter Retirement Planning Counselor’s (CRPC) designation from the College or Financial Planning and is a member of the Financial Planning Association. Please direct questions or comments directly to James at firstname.lastname@example.org.