While planning for the future, living in the moment

While planning for the future, living in the moment ...

By Brittany Mollica, CFP

When it comes to financial goals, were often thinking about big, long-term goals, such as saving for retirement, paying for college, or buying a house. These are fundamental concepts, though, focusing only on the long-term, can imply that shorter-term goals may be overlooked. However, life is about balance. It is important to look at your shorter-term priorities.

The Brittany Mollica

Is it better to fly to Bali for a marathon bike? Are you newly engaged and planning to pay for your own wedding? While these smaller goals may seem daunting as long as funding retirement, they may still be costly, and it''s wise to plan ahead. Read on for tips on how to get a balance on the day ahead and planning for the future. Enjoy your tropical vacay (or luxury car or dream wedding) without guilt.

Before you get any further, you should be very careful about what this short-term goal means and if its something you truly desire. Do your research on the estimated cost, compare prices, and consider your options. Below are some things you should look out for.

By doing this research, you will transform your goal from a blurry idea into a clear picture of what you want. At that point, you may choose it not as important as you originally thought. In the event, you may feel more confident this is something youre is planning to pursue. It''s time to make it happen.

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Before you begin booking flights, your first step is to determine exactly how much you want to pay. Depending on your estimated total cost, you may include: paying in cash, borrowing from your friend or family, financing with your bank or credit union, or a series of other things. If your objective is to take a vacation abroad, you may even be able to find a job that you can do at your destination (teach English, nanny, work at a hostel, etc.). Your financial advisor may help you

Once you have determined how much you will want to pay in cash, you can quickly set your monthly income target: divide the total dollar amount you need by the number of months available. The longer you can defer this goal, the less you will need to save each month, and the greater flexibility you will have.

One method to make this monthly savings even simpler is to open a separate bank account and automate the savings as much as possible. Most banks will allow you to set up weekly or monthly transfers from one cash account into another, which will help you save without having to think about it.

If you find that your regular cash flow doesn''t give you enough space to do this additional saving, you have a few options that aren''t involving paying debt.

  • Bring in extra income can you work overtime or find a lucrative side hustle?
  • Temporarily reduce your regular spending thinking about your current expenses, is there anything you can spend less on in order to help make this big purchase a reality? It can be tough to keep a tighter budget, so you may want to find ways to regularly remind yourself about your goal (start a countdown, change your phone background, regularly check your savings account, etc.)
  • Temporarily reduce savings toward other goals - while this is an option, we generally dont recommend completely suspending your longer-term savings just to save for a shorter-term purchase.

Once you have mastered the skill of saving, you''ll quickly go in the right direction. When it''s time to plan your snorkel trip or honeymoon, it may be beneficial to pay for those huge expenses with your credit card and then immediately pay your credit card off, which allows you to take advantage of your credit card rewards system while still keeping an eye on debt. Win-win!

When youre on the way down, you must immediately aim higher and find something bigger and better to accomplish. Even more so, once you have reached your savings goal when youre on the way down the aisle, your airplane is about to depart, or youre in the midst of signing a purchasing agreement at the car dealership, make sure you slow down and enjoy the moment!

When it comes to setting short-term (and long-term) goals, you will get the ideal balance of getting prepared for the future while still contemplating life in the moment. If you want a financial advisor to assist you in gathering your financial goals so you can remain more confident in your short and long-term goals, please contact us.

About the author: Brittany Mollica, CFP, CSLP

This material is provided as a compliment and for educational purposes only. Please consult your investment professional, legal or tax advisor for information on your situation.

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