Setting and Maintaining Financial Goals

by Nicole Ryan, Student Blogger

goals

We all have ideas for how and what we’d like to spend our money on, but it’s not always easy to budget and maintain your finances. One of the most important things when it comes to finance is setting goals for yourself. When you have clear goals in mind that you are striving to accomplish it is much easier to stay on track with your finances. Through some simple steps, tips, and tools you too can save and manage your money wiser and accomplish your financial goals!

1.    Determine Your Goals

When determining your financial goals, it is important that you prioritize them into three different categories, short-term, mid-term, and long- term, based on importance and how long you have to save.

  • Short-term goals: These are the goals that you feel can be achieved within a relatively short amount of time, such as the purchase of household furniture or appliances, minor home improvements, saving for a car down payment, etc.
  • Mid-term goals: These are goals that you feel you can achieve within the next five years, such as having enough money for a down payment on a home, or beginning to pay off a car loan.
  • Long-term goals: these are the goals that will take you longer than five years to achieve. These goals are typically in hopes to prepare you for the more distant future. They include paying for your child’s college education, buying a new house or car, saving for your retirement, or paying off your debt.

2.    Figure Out Your “Why?”

Why is the particular financial goal your setting important to you? This is actually something I learned in school. In many of my education classes we are often asked to determine our “Why?” Why is what we’re doing important to us? Why are we passionate about education? I think this is a great thing to do in many circumstances, especially when managing your finances. When you understand why a certain financial goal is important to you and your life, and what you are hoping to gain from that financial goal, you are much more likely to stick to it and see the goal through.

3.    Financial Goal Worksheet

One of the best ways to stay on track with your finances in order to obtain your financial goals is by filling out and actively using a Financial Goal Worksheet. A Financial Goal Worksheet helps you identify what you plan to accomplish, the resources you will need to do so, the time needed to accomplish the goal, and how this goal fits into your overall budget and life. This worksheet will give you a visual, tangible representation of your goals that will help manage your budgeting and keep you motivated! Use this Financial Goal Worksheet to help you get started.

4.    Set a Goal Date and Monitor Your Progress

When setting a financial goal, it’s good to know around about when you’d like to achieve said goal. Having a goal date gives you a set time you’re working to as well as a set amount of time to get what you need to accomplish the goal done. As you go along, remember to monitor your progress. You’ll want to know how close to or far from your goal you are and what you need to do to continue on the right path. Monitoring your progress will enable you to stay on track and make the right decisions that will benefit your financial goal you’ve set!

Helpful Tips:

The following are some helpful tips that you should keep in mind when setting and working toward your financial goals.

  • Be realistic: Don’t set goals that would never be possible according to your budget. Also, make sure you have realistic time frames for your goals. Basically, don’t expect to be able to buy a house after only saving for 6 months.
  • Stay Motivated: It’s important to not lose motivation when working toward your financial goals. Life will always throw curve balls at you. It’s near impossible to make a plan and have everything go 100% smoothly. There are going to be bumps along the road, but if you stay passionate and motivated toward your goals you’re going to accomplish them.
  • Don’t overwhelm yourself with goals: If you’re trying to accomplish too many things, you don’t have time to individually focus on any one goal and you’re much more likely to not be able to accomplish them. Make sure when you’re setting financial goals that you only set as many as you can successfully handle.
  • Be flexible: Sometimes life gets in the way and you may not be able to accomplish your financial goal in the amount of time you initially anticipated. Don’t let that get you down. Just remember to keep moving forward and know that even if you can’t accomplish your goals in the amount of time you wanted to, it can absolutely still be done!
  • Visualize and be specific: Don’t be generic on your goals. Have a vision for what you want to accomplish and work for that vision. As Walt Disney said, “If you can dream it, you can do it.”

Tools and Resources:

A great way of keeping on track with a financial goal is knowing the tools you can use to help you along the way. Here is a list of some helpful resources you can use!

  • a separate savings account: One option is to set up a separate savings account for your specific financial goal. This way you can track how much you’ve saved for that specific goal more accurately.
  • www.mint.com: Mint is a great option if you want to link all of you financial accounts to one single platform. Mint allows you to stay organized, allows for easy budgeting, free credit scores, and investment tracking. According to the website, “See all your balances and transactions together. Mint automatically pulls all your financial information into one place, so you can finally get the entire picture.”
  • www.buxfer.com: Buxfer is another great site to manage your finances. Like Mint, Buxfer allows you to see all of you accounts in one place. You can upload bank statements or files as well as make money transfers to other accounts or family and friends. Their website states, “Buxfer helps you see all your accounts at one place, understand where your money goes, reduce unwanted spending, and save for future goals.”
  • www.levelmoney.com: This is an app that informs you of how much spendable money you have as you make purchases throughout the day. Level money lets you track and manage your spending so you can know what you have left to spend and what you need to save. They say, “Draw a straight line from everyday decisions to larger achievements and accomplish the things that matter.”
  • www.personalcapital.com: Personal Capital is a free software that helps you make better financial decisions. The software helps you invest smarter and manage your finances easier. According to their website, “See all your accounts in one place with our award-winning software. Our free tools let you manage your entire financial life from one secure place – so you can reach your goals faster.”

As a college student, I feel it’s important I set financial goals for myself. For example, each summer when I go home, I work and save my money so that when I return to Boulder in the Fall I’ll be able to pay the majority of my rent for the year. On the long-term side, I have a FDIC Money Market account which I occasionally will add money to. This gives me a savings I can build throughout college and have when I graduate. I know when I graduate I’m going to have loans I’ll have to start repaying, so I’m making sure I save as much money as I can now so when I graduate I’ll be able to start paying them off. I’m well aware that when I leave CU, real life is going to hit and it’s important I’m prepared!

Having financial goals is one of the best things you can do. When you have clear goals and a path you’re following to achieve them, you’re much less likely to make big money mistakes and your overall financial state will be better.  No matter what your budget is, you can always set goals. Just remember to be realistic, flexible, and motivated and you’re sure to succeed!

Good luck!

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5 New Year’s Financial Resolutions

by Niomi Williams, Associate Program Director, CU Money Sense

new years resolutions

Some people may not believe in making New Year’s Resolutions, but everyone should at least have financial goals. Below are five tips/goals/resolutions to consider this year:

1. Keep track of your spending. Try using a financial app like mint.com (free) to help you keep track of where your money is going.

2. Review your monthly and yearly expenses. Determine if you should spend less, focus on debt, or save more.

3. Create a budget. We say this all the time, but budgets really are awesome. It helps you tell your money where to go instead of wondering where it went. Schedule a one-on-one financial coaching session with CU Money Sense to help you plan out a budget for the new year.

4. It’s never too early to think about retirement. If you’ve ever worked part-time or full-time, chances are that your current or former employer enrolled you in a retirement plan, such as a 401(k). There might not be much in the retirement account, but even if there’s a few dollars in it, you have some options on what to do with that money. Take the time to find out which (if any) retirement accounts you might already have—you can do this by contacting your (former) employer.

5. Live like a college student. Let’s say you received a refund check this month, after paying all of your tuition, books, and expenses. I know from experience that it’s so tempting to spend that refund on fun stuff—new clothes, dining out, ski trips, going out with friends, etc—because it can seem like FREE MONEY. But then two months later, you bank account has less than $50 in it and you’re suddenly panicked because you’re broke and can’t remember what you spend all that money on! I see it happen all too often with students, which is why is it’s important to embrace the “poor college kid” perception and try to keep your lifestyle within your means (by not spending more money than you have).

These are just a few ideas to help you get on track with your personal finance. If you have any questions about ways to best handle your money, remember that we are here to help! Schedule a one-on-one appointment with our Certified Personal Financial Manager; appointments are confidential, personal, and specified to your needs.

 

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