Goal Setting

Part of budgeting is getting a handle on things. Identifying completely indebtedness and earnings, clearly seeing outflows in specific numbers, and examining the true yield on our saved $. These are part of the process.

Gaining a complete picture of our finances can be a goal.

Let's brainstorm of other goals, specific goals.

As a couple, we set the goal to cover our daughter's college costs should she attend a state school. As her graduation neared and she considered a few private institutions, we were set on limiting our help and hoped she could qualify for loans.

She was accepted to the only college she applied to and attend four years at a state school. She graduated without student loans and we had enough to cover the then $11,000/year.

We started our savings for this goal when she was 10 or 11. We invested a few times over 3 years in zero coupon bonds. Rates were much better than we could dream of today. We knew exactly what these bonds would pay out as they matured on four consecutive Augusts.

My point is that we need to set goals. If our goal is retirement, we need an established $ amount. One professional who works only with seniors has stated that we will need $1,000,000 to cover expenses in retirement. She is very attuned to health care costs and long term care costs. She was speaking of those of us in our mid to late 50s. A shock?

Take some time and consider your goals. Be as specific as you can. Research true costs and don't forget to factor in inflation. Our daughter's education would have cost her $5,500 per year when she was 10. We figured $10,000 would be needed per year and it turned out to be $11,000. College costs rise about 4% per year, more than most things.

'til later