Managing your finances is a lot like planning a road trip. You should start both endeavors with a destination in mind, make sure your vehicle is in good working order, carefully plan your route, and have a clear vision of what you’ll do when you arrive at your destination.
Setting smart financial goals requires a good understanding of just what you want to achieve. Start by thinking about what kind of trip you need to take. Is your journey going to be a short jaunt, such as saving to buy a big-ticket item like a computer? Or is it a longer trip, such as saving for retirement?
Next, check over your “wheels.” In terms of financial planning, good credit, and smart saving and spending habits are the vehicle that will carry you to your destination. Keep yours in good repair by monitoring your credit regularly, taking steps to improve your credit score if needed, building your savings and managing your spending.
Once you know your vehicle is in good working order, you can start planning your route. Will you reach your destination by increasing your income? You may need a brief detour to pick up additional education. Is your financial destination a secure retirement? Finding just the right mix of savings and investments might be the best route for you.
While the journey toward your financial destination is important—and hopefully part of the fun—don’t forget that it’s also vital to have a game plan for what you’ll do once you’ve arrived. If setting smart financial goals is difficult, imagine how hard it is to hold onto success once you’ve achieved it. Just as a vacation can go downhill if you haven’t made plans for what you’ll do and see, your financial destination can go awry if you don’t have a plan for how you’ll handle success once you’ve reached your goal.
Hopefully, you’ll be able to find just the right roadmap to help you reach your financial destination—and enjoy the journey along the way.