Month 2 Set Long Term Goals

Want to make sure your money is working for you? Make sure to set long term goals to stay on your financial trackIf you don’t figure out your long-term¬†financial goals, you will almost always fail to reach them, because short-term needs are always so demanding.

Strategy: Set up a new worksheet with these four headings: Annual Pretax Income, Annual Expenses, Goals and Estimated Cost of those goals in current dollars. Below, I have listed a few goals that some may want to include on their worksheet.

College for your children

The cost of college per child now is roughly * $20,000 + per year academic year at the high end and $12, 000 per academic year on the low end. Multiply the annual cost by the number of years in college, for a range of $80-$36k, and by the number of children. Like everything else, college costs increase with time. The annual increase is about 6-8%.

Worry-free Retirement

Multiply your current annual expenses by 0/8% (if you make $50,000 a year, that’s $40,000). This is about what you will need annually to retire comfortably. Ideally, your investments should be able to provide you with this annual retirement allowance while continuing to grow with inflation.

Homeownership

With a down payment of 20%, the most expensive house you can purchase is about 2.5 times your gross annual income.

Insurance

If you become disabled or die and you have a spouse and children, your family will need 70% of your current income, or 50% if you have just a spouse and no children. If you don’t have insurance, start researching policies now.

Setting long-term goals for your finances helps keep you on the right track. If these goals stay first and foremost on your mind, you are less likely to spend frivolously or live beyond your means. What are some of your long-term financial goals? I’d love to hear from you. Be sure to comment below.

*All price data are reprinted from the U.S. Department of Education’s 2016-2017 IPEDS Survey and reflect reported costs for the 2016-2017 academic year

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on Month 2 Set Long Term Goals

    • tracie45
      January 9, 2018 at 8:55 pm (5 months ago)

      Thank you for reading and commenting Mindvalley Academy.

      Reply

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