Articles - Archived Money Matters

Setting Financial Goals

Setting goals is one of the most important parts of your financial well-being. Without goals, you may lose focus of your finances and find yourself in a bind. By identifying them, you clearly know where you're going. Think about it: When you get in the car, you have a destination and route in mind; with your finances, you won't know where you're going until you identify and set financial goals.

Financial goals fall into two major categories: short- and long-term. Short-term goals are those you wish to accomplish within the next two years. Long-term goals are more than two years away. It is often easy to lose track of your long-term goals since they can sometimes be 10, 20 or 30 years away. That's why it's important to identify and commit to your goals by writing them down.

Once you have determined your financial goals, you need to figure out how you're going to reach them. A budget, financial calculator or financial professional are some of the tools available to help you lay out the steps. You'll also need to identify a time frame for your goal, and the cost for achieving it. Does it fit into your budget? Use the following formula to determine: goal / number of months to reach the goal = required monthly savings.

If the required monthly savings is more than your budget allows, you can reduce other expenses or save for a longer period of time. When calculating goals, such as retirement and college savings, you may want to consider using financial calculators and professionals. LGFCU has financial professionals who can assist you with your goals and calculate the necessary savings for you. Just give us a call at 877.367.5428 to start on the path.