Be specific and realistic
Set goals that are specific and measurable. Instead of saying you want to have enough money to retire comfortably, think about how much money you'll need. Maybe your specific goal will be to save $500,000 by the time you're 65.
6 examples of specific goals
- Pay off your credit card debt within the next 6 months.
- Pay off your mortgage faster by paying down an extra $5,000 each year.
- Save $20,000 for an emergency fund within the next 2 years.
- Save $25,000 for a down payment on a house over the next 3 years.
- Save $40,000 for your child's education by the time she turns 18.
- Save $5,000 for a vacation next year.
5 questions to ask yourself
Your goals should also be realistic and based on your current financial situation. Think about how much you can afford to save toward your goals each month. Based on how much you can afford to save, you may have to decide which goals are most important to you.
- How soon do you want to reach each goal?
- How much money will it take to reach each goal?
- How much can you afford to save toward each goal?
- What will you gain or lose by putting one goal first?
- What choices will help you enjoy a better quality of life today? In the future?