Budget Guide - Setting Long Term Goals

Budget Guide - Setting Long Term Goals

Using a Budget to Set Long Term Goals

saving money

Setting goals for education, retirement, or a new home

As you begin to feel comfortable using a budget, your budget will help you not only to spend within your means, but also to plan for long term goals. Setting long term goals, such as saving for retirement or securing a mortgage, can be quite daunting, when you look at how much they cost. However, when you break up the cost into manageable monthly amounts, you can begin to take steps to achieve even ambitious financial goals. It’s that first step that is a doozy, but if you commit yourself and take the leap to be financially sound you’ll end up at your goal before you know it.

Once you have identified your goals, determine the timeline for achieving your goals. Calculate how much you need to save each month to reach your goals. With that information, you can then review your budget and begin looking for areas to reduce your spending and begin saving for that new home, that big vacation, or paying off your student loans.

GoalTimelineCostMonth Savings RequiredAction PlanRanking
Down Payment for Mortgage5 yrs$20,000$333.33Save & establish credit1
Pay off Student Debt3 yrs$10,000$277.78Increase monthly payments2
Trip to Europe10 yrs$5,000$41.67Cancel cable TV package4
Add to Retirement Savings25 yrs$75,000$250.00Cut expenses3

Don’t neglect planning for your retirement. The earlier you get started, the less you have to budget each month to build a sizeable nest-egg.

Back: Eliminating Unhealthy Debts Next: Road to Financial Freedom

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