Sit down and have a chat with your family:
- What do you like to do?
- Where would you like to go?
- Do you want to buy a house?
- Do you want to have children?
- If you have children, do you want to pay for them to go to college?
The Written Word is key
The possibilities are as unique as every person, and this should be a discussion where all ideas are open for consideration and get written down. Dad wants a new Porsche? Write it down. Little Jimmy wants a bicycle? Write it down. Everyone wants to take a trip to Six Flags? That's great! Write it down. New couple wants to know the joys of home ownership? WRITE IT DOWN.
So let's drum up a sample list of different financial goals.
- Jimmy's new bike
- New House
- Porsche
- Ice Cream every Sunday
- Go out to eat twice a month
- Retire at age 60 and be able to live to be 160
- Put Jimmy through college
Now these are 7 general goals (this is an example, you could come up with hundreds fairly easily). Obviously some of them are more pricey than others, some are more specific, some are very general. Now it's time to prioritize.
Break the goals up into short-term and long-term.
Short-term
- Jimmy's Bike
- Ice Cream every Sunday
- Going out to eat twice a month
Long-term
- New House
- Porsche
- Retirement
- Jimmy's education
Now you just need to use the short-term goals to drive your long-term ones. I'll use the Porsche for an example.
Let's say that it costs $60,000 (I have no clue what a Porsche costs)
$60,000 becomes your big savings goal, your short-term goals should motivate you to continue to save. Just make milestones in your savings. So, if Ice cream for the family costs $30, set a goal that everytime $130 is added to the savings account, everyone gets ice cream. The result is that everytime you've saved another $100 you get rewarded for saving.
That about sums up this article, anyone want to clue me in on how to post an excel document I could chart this for you.
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