Setting Your Goals

Setting your goals is essential to creating a budget. That's because reaching your goals makes the effort to plan and manage your spending worthwhile.

  • Think about what you want to accomplish financially in the next three months, the next year, and the next three years.
  • Write down those goals, the date you want to accomplish them, and their approximate cost. You may have to do some research to estimate the cost.

Remember that the most effective way to reach your goals is by saving more. The idea is to build an emergency fund first and then start saving for your goals, like more education, a car, or maybe a vacation with your family or friends.

Ideally you should save 10% of your net earnings every paycheck. It's a good habit to form. There are two good ways to save regularly:

  • Ask your employer to directly deposit some of your paycheck into your savings account
  • Write a check to your savings account when you pay your monthly bills