Although I wrote about creating a budget first, I firmly believe that the most important part of financial planning is setting goals. The whole point of having a budget isn’t to keep you from having fun or force you into a life of self-denial. The reason you have a budget is so you can meet your goals. Your goals. The things you want or dream about or just really, really enjoy!
Goals can be anything. They can be short or long term. They can be general or specific. They can be selfish or selfless. What matters is that you find them desirable or important. If you don’t, you’ll never get a handle on the more immediate task of budgeting.
For instance, let’s say you want to travel to Europe next summer. So, you figure out exactly how much you need to save, and you figure out a budget so you can implement your savings plan. A few days later, you go shopping and see a fab new pair of shoes. You could buy it. Sure. But you have a budget in mind, and you know your goals. If you buy the shoes now, it’ll take you longer to get to Europe.
You may decide to deny yourself something you want right now, but you do it because you know you’ll be using your money for something you want more. That’s why goals are so important. Knowing what you want and what it will take to achieve that desire helps keep you on track.
Because goal setting is such a big picture kind of task, it would take one heckuva long post to deal with the topic. So I’m not going to go into it here. What I would encourage you to do, however, is take some time to think about what is important to you. It’s never too early to think long term, even if you’re still in college. Even if you’re still in high school! Your goals don’t have to be written in stone, but having some idea (even a vague one) about what they are and when you would like to achieve them will help you tremendously in managing your finances.
