Nevada County Picayune and Gurdon Times Newspaper Archive

Living Well With The Carrie Connection

"If you don't know where you are going, how will you know when you get there?" is a humorous saying often quoted. But it isn't so humorous when it pertains to financial goals.

Want to retire early? When is early? How much money will it take? When do I need to start? How do I save? How much will it cost? Want to purchase a house? How much can I afford for monthly payments? How will I save for a down payment?

Again, all of these questions are answered by setting financial goals.

How can you and your family set and achieve your financial goals?

Many financial goals involve saving or accumulating funds. Setting this type of goal is easier if you sit down as a family and set financial goals that are chosen by all family members. Your goals will depend on what is important to you as a family.

After setting these goals prioritize them. Which ones are most important? Which are not as important? Which are long (five years or longer); which are intermediate (three to five years); and which are short (fewer than one year) term goals?

Having these goals selected and written down by the entire family makes the second step easier. How much will it cost to accomplish these goals? The cost of some goals are easy to determine, such as a new car or appliance. The cost of others may be more difficult to determine, as vacation or college costs may vary greatly. Try to be realistic in calculating the cost of family goals.

Now comes another family challenge  how to accomplish these goals.

Since many financial goals do involve saving money, each family must decide how this can be done. The family may have to reorganize their spending plan. Other families may have to develop a spending plan for the first time. Whichever scenario applies to your family, make saving for the goal a part of the plan. Think of saving for the goal as a fixed expense in any spending plan. Don't decide to save what is left. Saving what is left over after the spending plan is in place often results in little or no savings at all.

So, where will money for these goals come from?

Saving for a specific goal can help the entire family develop a saving habit. Saving is a habit and it takes time to develop a habit. If your family has little or no savings begin saving for a goal that may be achieved in a short time, perhaps several months. If you are successful in reaching that goal, set another goal that may require saving a larger amount of money for a longer period of time.

Just as the financial goals were decided by the entire family, how to save to meet these goals should be decided by the entire family. If at all possible make saving fun. If the family decides to save for a vacation display a photo of the vacation location in a prominent location.

One way to achieve the goal is to ask all family members to save loose change. The family could also save money by eating out one less time per month and actually save that amount by putting it into a savings account. One family member in the family saving a quarter each day can save $91.25 in a year. If each member of a family of four saves a quarter each day, the total would be $365. Small amounts can add up!

After the family has set a goal developed a plan to reach the goal, and accumulated some savings, they should decide where to keep the savings. A piggy bank is a good start, but some type of savings account should be used to keep the money safe as well as to earn interest.

Financial goals  everyone needs them.

For more information that will help your family develop and meet financial goals contact the Nevada County Cooperative Extension office.