What are your financial goals?

[jeffrey]

What are your financial goals and what are some of the significant financial goals that you had in the past and have already reached? Personally I think that one of the biggest reasons that people have trouble with money is because they never set out concrete money goals, and I think that if members are willing to share (with the reasoning behind why they had that goal) it might help those better form their own financial goals.

[dojo]

Right now we're expecting a child, so our main financial goal now is to have the money for the birth/first months. In my country, even if you're insured, if you want quality medical services, you need to pay. And quite a lot (compared to the wages). So we're making sure we have the money for me to give birth in a private clinic (the hospitals are absolutely horrible). We also need to have a lot of stuff bought for when our daughter 'arrives'. It's just 5 more months till then, so we need to make sure it's all set up.

We also save for vacations (budget separately for them) and there are long term goals (retirement) for which we are already putting money aside.

As you said, having clear goals really helps

[kork13]

Personally I think that one of the biggest reasons that people have trouble with money is because they never set out concrete money goals

I totally agree. Personally, having my major financial goals written out has really helped me focus my efforts in working toward them. Having them written out also makes it real easy to share, so here's my present goals:

SHORT TERM: (now-5 years)
- I'm planning to get married next April or May. Save at least $8k, preferably $10k by Apr'14 (currently have $3500)
- Payoff Car Loan NLT Aug'14 (current balance $9k)
- Finish funding my EF (need $2k more) by Aug'14 & House Maintenance Fund by Dec'14 (need $3k more)
- With full EF & zero debt (except mortgage), save like crazy into General Savings (cash) fund & taxable investments
MID TERM: (5-20 years)
- Own home outright by age 40 (year 2026) -- current mortgage balance: $122k
- Purchase next (second) home with at least 50% downpayment (whenever that may happen)
LONG TERM: (20+ years)
- Retirement savings of $2M by age 60 (year 2046) **This is in today's dollars -- inflation adjusted 2046 value would be somewhere between $5M-$6M
- Pay at least 50% of college expenses for children

As for goals I've already met, the biggest one was to buy my house with at least a 25% downpayment, which I did about a year ago now... $180k home (including closing costs), with $130k mortgaged & $50k downpayment (so about 27% down). I've also previously paid off a car about 4 years ago (sadly had to sell it when I moved overseas), and bought my current car last summer with a 50% downpayment (I only got a loan on it to preserve cash for buying my home... Otherwise I'd have easily bought it in cash). Back in college (and really ever since), my goals were simple: live inexpensively, save as much as possible, and max out my Roth IRA (which I've done since 2006).

[MonkeyMama]

Past Goals:

--Get into a home ASAP to manage long term cost of housing. Our first goal out of college was to put 20% down on a condo. (We couldn't hardly afford to hardly rent without roommates, but buying a home would buy us a significantly lower monthly housing cost). Time was of the essence, so we saved 100% of our raises and did not raise our college lifestyle until we got into a house. It didn't take very long in the end - we both went from $10k to $30k income out of college and had a raise to $40k within the first year out of college. Considering this was one crazy expensive city, I share because this was not some big bucks/easy thing. Crazy housing expense meant crazy savings measures to get ahead of the curve.

--Wanted spouse to stay home with kids for a few years and never wanted to rely on second income anyway (just a natural built in safety net) and so after we got into our first home we raised our lifestyle a wee bit, but then we made sure to always 100% save my spouse's paycheck. We just pretended the money was not there - his paychecks went into a savings account. I felt we needed an extra large nest egg because as the female I would be the one working but could be more sidetracked by pregnancy disability. & we also wanted ample maternity leave funds. In the end, both my pregnancies went smooth, and kids were healthy, and so we actually never even touched one penny of all that second income we had saved for several years. I remember those years most our friends were absolutely panicked and very stressed financially. We didn't really have a financial care in the world. Lost half of our income? *shrugs* {I would have recalled that we probably relied on some of that nest egg through my maternity leaves at least, but recently was going through financial records and surprised to see we did not even touch one penny of that savings account for the first 5 years my spouse was not working. We eventually invested the money and bought a nicer vehicle, when we had made it out the other side of my pregnancy and maternity leaves}.

--We have always had an overall money goal to stay out of debt. (Mortgage debt being the obvious exception). This means shopping colleges carefully and buying very modest first cars. In our teens and 20s I don't know if we hardly bought *anything* new - a lot of used goods bought over the years - cars, appliances, games, furniture and so on.

Goals are everything. Without goals I can't see that we would have achieved even a small fraction of what we have achieved. I could very easily be in debt up to my eyeballs and have a mortgage or rental payment twice the size, if I didn't have a plan. (In the region I live in, bankruptcy and foreclosure are pretty common - even among friends who have never suffered a job loss or hardship).

--Our primary goal since about age 25 has been retirement. That's about it, since all our other ducks are in a row. Our ongoing annual goals at current are to max out our retirement contributions, save a few thousand dollars in cash (for home maintenance and to replace cars) and put some extra to the mortgage. Spouse's future income will go 100% to pay off mortgage, to pay for college, and to fund early retirement (probably in that order). If for some unlikely reason he never ever works again, I have it covered, but it's just more slow going without the extra 5 figures per year. We are still on track for early retirement, regardless, because of our past achieved goals.

[EarlyRetirementJoy]

I want to add to this already terrific discussion thread, that there is value to continuing to have goals even after reaching retirement. Now that we are here, if anything we have more goals than during our working years. Long term travel, replacement vehicles, ongoing maintenance on our home, property improvements, plus leaving a surplus at the end for our children, all end up moderating our spending behavior in the present.

Short Term Retirement Goals: Stay on track with our budget so we can continue to utilize our annual Travel, Hobby and Entertainment budget allocations at 100%.

Mid Term Retirement Goals: Continue to live within budget so our Major Items budget line can continue to be allocated. Use these funds to replace our automobiles once they approach 100,000 miles, and to maintain and make capital improvements to our home.

Long Term Retirement Goals: Continue to withdraw slightly below 3%, so our portfolio continues to outpace inflation. At the point the first one of us reaches Social Security and Medicare age, meaning our withdrawal rate will drop even further, upgrade our RV (a travel trailer currently) to a Class C motorhome so we can spend four to six months at a time on the road. Alternate with living/vacationing in another state or country for part of each year.

[Bob B.]

Past financial goal: When I joined this site my financial goal was to eliminate massive CC debt. Done.

My current financial goal is to maintain only one car payment. DW's van is paid for, and we are making payments on my truck. I took out a 36 month loan last December, but depending on how aggressive I am with payments, we should be able to have it paid off a year early. Barring an emergency, we will not buy a new family van until the truck is paid off.

Long-term financial goal is retirement savings. I save 16% of my salary (my contribution + employer match) toward retirement. I plan to increase that by 1 percentage point each year until my personal contribution is 15%. I'll increase my contribution in October.

[feh]

Financial goal: achieve our "number" and retire early. Unless the market takes a dive, that will happen in 3 years.

The flip side of "having a goal" is that such goals can seem overwhelming to some. Note the recent thread by somebody that struggles with the thought of needing to save 7 figures for retirement.

[bjl584]

I'm working toward hitting a number so far as net wealth is concerned so that I can retire early.

[ua_guy]

We want to own our home before retirement and that should be easily do-able. We want to have enough cash to retire by the standard age of 67, if not sooner. Short term, we're looking at a roof replacement on our home and paying off vehicles in the next few years, while continuing to pay and save for our larger goals.

The easiest part is setting goals; the hardest part is determining the numbers behind the goals with regards to long-term strategy.