After a year of setbacks, postponed plans and well… disappointment, you may be looking forward to getting back to the plans you had before the pandemic – but they may come with a price tag. Start planning now! Here are some tips on making sure you can afford those big plans.
Make sure your goals are realistic, detailed and clear – then write them down. Let’s say you want to buy a new car. You need to determine the price of the car and how long you want to save for it. Remember, you will often have multiple financial goals to achieve. Besides the new car, you might be considering buying a home, funding higher education, paying for a wedding, taking a vacation or accumulating retirement nest savings. Each financial goal has its own price and time horizon – when you need the money. Categorize your goals as short-term (3 years or fewer), intermediate-term (3-7 years) or long-term (more than 7 years).
Make a plan
To achieve all your goals, you need a plan. Starting from assets you already have available; you will need to determine how much more you need to accumulate and when you will need it. Don’t neglect to consider that the price of your goal items might increase as well. Depending upon how you invest your savings over time, you might receive interest, dividends or capital gains to help you along – you should consider this as well. You might determine that you can achieve some goals in less time. Or you might find that it could take longer. The time horizon is important to setting realistic goals.
Track your progress
You should always monitor your goals to be sure they are on track. Set up a way to measure your progress. If you see that you are lagging behind, you may need to make an adjustment in the amount or way you are investing. If you are way ahead, you may want to be more conservative, shorten your time horizon, or add a new goal.
Ask for help
Planning ahead doesn’t have to be a solo job. Be sure to ask for help if you start feeling overwhelmed or stressed. If you can’t seem to kick that feeling, talk to your doctor or call the behavioral health number on the back of your health insurance card to connect with a mental health professional about coping techniques, resources in your area and more.
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