“Income twenty shillings —
expenditures nineteen shillings and sixpence —
Income twenty shillings —
expenditures twenty shillings and sixpence —
WILKINS MICAWBER (DICKENS)
Many of us in our late teens and early 20’s have never really thought about our financial aspirations. No, I am not talking about having enough spending money for your next semester at college. I am talking about your long-term financial goals. These include if you want to buy a house, at what age you wish to retire, how many kids you want to put through college, how much you want to earn, and many more.
You may say, “Hey, I’m just trying to figure things out, I’ll take it as it comes.” Well, the truth is that the sooner you set goals, the sooner you will be able to figure out how these goals can go from a nice dream to a reality. The same goes for any goal you set. If you want to run a marathon one day, you can’t just run it; you have to set that as your goal, develop or find a training plan, and stick to that plan.
The first step in the process of setting your long-term financial goals is simple: write them down. Whether it’s on a piece of paper, a sticky-note, or the notes application on your phone, writing down your goals is a crucial step. A sample list of goals could be to own a house by the time you turn 25; pay off your student loans within five years of graduating, earn six figures by your mid 30’s; and to retire at 60.
This is where your goals begin to transition from a thought to a plan, as they are now physically there for you to see, instead of floating around in your head. Once written out, take the time to read them over every once in a while. If it’s once a week or every day, reviewing your goals will allow you to stay on track and motivated, as well as give you the opportunity to add to or edit your list.
While coming up with your long-term financial goals may only be the first act of a long process, it is nonetheless a crucial point that will allow you to visualize and begin to plan for how you will accomplish your dreams. To quote the Chinese proverb, “A journey of a thousand miles begins with a single step.” The next step in your journey is learning strategies to stay on top of your finances so you can stick to your goals, which I will discuss in an upcoming blog post.
For more information on setting financial goals, as well as a variety of other topics, check out AIER’s Start Here digest. Dedicated to helping young people set their “life strategy,” the Start Here digest is a great resource for high school and college students interested in getting their financial lives on track. Best of all, it’s free!