Personal finance is one of those areas that everyone needs to know about. It is a subject that should be taught in school so that young people are taught basic financial principles that will ensure their success as adults. The better your understanding of personal finance, the better your chances of reaching your financial goals. Financial goals are those monetary aspirations that every person would like to achieve. Financial goals can take a few months to achieve to years depending upon how lofty the goal. Let’s take a look at a few of the more common financial goals.
Saving Enough Money For Retirement
Planning for retirement is the number one savings goal of most people. It is getting harder for more people to afford to ever be able to completely retire. The average American between the ages of 50 to 59 has just $29,000 saved for retirement. This is well below what is needed to be able to live a middle class lifestyle in the country. The low amount of savings will make retirement virtually impossible for most Americans. Proposed cuts in Social Security will hamstring the already tight budgets that seniors will have in their latter years.
Paying For Your Kids College
Wages may not be rising but college costs surely are. According to Walletpop, the average cost of attendance at an in-state public college increased 6.1% to $16,140. The average cost at a private university increased 4.3% to an average of $36,993. That is a huge cost for any family to bear. College degrees will only get more expensive over the next 10 to 20 years forcing families to come up with extra cash or leaving students burdened with student loan debt.
Eliminating All Of Your Debts
The average American credit card debt is in the five figures with most people owing over $10,000 to banks. That figure does not include mortgage payments, auto loans, student loan debt, personal loans, and other financial obligations. Having a large amount of debt means that people go to work for their creditors and not so they can ever really enjoy the fruits of their labor. Mailings for new debt are sent out to individuals and businesses alike day after day. The entire financial system works much harder to keep you in debt than to help you out of debt.
Building Wealth For Your Family
The middle class in the country continues to shrink and many people are joining the ranks of the impoverished. One of the ways that individuals can be freed from financial pressures is by creating wealth. Wealth can be passed onto family members and be used for the betterment of society as a whole. It is a way of creating a financial legacy that will outlive you.
Which of these do you consider to be the most important goal for your financial future?
These are all good goals to have. I would like to first begin to eliminate debt. I think doing that would free up extra money to be used for building wealth. The other goals should then start to take care of themselves.
Good point. Debt is a major encumbrance.
Saving enough for retirement is my big goal I guess but right now I’m really focused on avoiding taking on student loans for my MBA to make sure I don’t get too far behind.
My biggest goal is to have enough investment income to not have to work. Right now I am focusing on retirement funding but also trying to find another rental. I am 15% of the way to my goal.
My biggest goal by far is to build a portfolio large enough so that at 40 years old I’ll be financially independent. I also have some student loans that I’m actively paying off, but due to the low interest rates (~3%) and the tax subsidies, I’m not in a huge rush to pay them off. I do pay more than what is required every month, reducing the principle by the added amount. I don’t have any credit card debt. I’m not saving for a college education, as I don’t plan on having children. I’m truly excited to be financially independent one day.
Thankfully I’ve already met my biggest financial goal and that was paying off all my debt (whew!). Now I’m progressing with the goal of building up a portfolio that will generate enough passive income through dividend that I can retire early or scale back the amount of work that I’m doing.
Congratulations on being debt free!
First goal is to pay off expensive debts, I don’t mind paying off student loans slowly because the interest rate is so low, I can make more investing. So I work on increasing my return instead of rushing to pay off those debts early. No kids, so no college tuition to worry about and if I can stay under the Roth income cut-off for a while and max out contributions, I will be retiring with tax free money that will pay out about 40k a year for 40 years once I retire.
40k for 40 years is not bad at all!