Friday, November 29, 2013

The Importance of Setting up Goals

My financial mentor told me once, “To be able to go to your destination you must have a clear picture of your destination and a plan on how to do it.

Family finance is different from personal finance because on the first you will deal with several people with different ideas, sometimes with not aligned goals and time lines. A harmonious relationship should have in-sync goals and timelines with complementary ideas. So the first thing to do is to talk to each other and agree on a particular goal and be willing to review them from time to time.

Our family finance has gone an overhaul when we both wanted to purchase a car. He wanted a second hand car while I wanted a brand new car. We were discussing the different scenarios for quite some time until he came up with a decision and convinced me to jump in the boat with him.

We are gearing towards the end of the year so I think it’s about time to rethink our financial goals and plans in the next few years or so.

Here is a clear picture of our budget and savings plan.

*Short Term Goals (those that can be achieved within 3 years)
short term goals
savings per month
emergency fund

pregnancy fund**
car fund

**pregnancy fund will become baby fund when applicable

*Mid Term Goal (those that can be achieved in 5 years)
mid term goals
payment per month

*Long Term Goal (those that need more than 10 years)
long term goals
savings per month
investment surplus

educational fund
retirement fund 2.0

We also came up with our monthly spending plan which I think would make us more organized and more conscious of our spending.
household expenses
Association Dues
Electric Bill
Water Bill
Internet and Cable
Paul's allowance
Millette's allowance

With these savings and expenses laid out, we also need to utilize all our bank accounts to accommodate each expense so that it’s more organized and become pretty straight forward.

Yey brighter future. ;)

PS: Insurance payments included in allowances. * 

Till next time.

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