President's Choice Financial|helpful stuff|financial wellness|the basics

setting financial goals

While it can be fun to get in the car and start driving without knowing where you're going to end up, few people would consider it a smart strategy for a successful holiday. That's why most of us take the time to plan our holidays, deciding on a destination, how we're going to get there and where we're going to stay.

In the financial realm, planning is even more critical. However, before you even begin crafting a plan for your financial future, it's essential to set out your objectives and what you hope to achieve. Answering the following questions will help you determine both where you are today and where you want to end up.

What is your current financial situation?

For instance, how much have you already saved? What is your debt load? Have you started investing? In what types of investments? How much excess income do you have on a monthly basis?

What are your short-term goals?

These can be as short-term as paying off your credit cards over the next six months. Maybe you want to save for a down payment on a house or to buy a new car. Or perhaps you're planning for a wedding in the near future. It's important to figure out what your big-ticket expenses will be over the next little while — and how much each will cost — so you can get a clearer picture of how you're going to pay for them.

What are your long-term goals?

Everyone has dreams for the future. Determining what yours are now will help ensure they become real. When do you hope to be mortgage-free? Do you want to retire early? How much money will you need to support your chosen lifestyle after retirement? Are you planning to help pay for your children's post-secondary education? Will you need to help your parents out financially?

Understanding your financial goals is the integral first step to making sure your investment strategy is geared towards making those goals a reality. Take the time now to sit down and figure out how you plan to spend those dollars you're saving — that way you'll be closer to ensuring you have the amount you need, when you need it.

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