If you want to reach a certain financial threshold at a certain point in your life, it is important to set financial goals. If you don't, the odds are that you will end up like most people at retirement - depending primarily on Social Security for your welfare.
Ideally you want to begin to set financial goals as soon as possible. The sooner you begin, the easier it will be. For example, if you place $5,000 in a 401k account when you are 20 and average about 7 percent interest per year, by the time you reach 65, you'll have over $100,000 in that account - even if you never add another dime to it.
However, if you place that $5,000 in the same account at age 40, you'll only end up with about $30,000. In this instance, time is money. The sooner you can start investing in your future, the better off you'll be in the long run.
This is also true for just about most other financial goals that you have. Whether you are looking to save money for a down payment on a new house, set aside a college fund for your children, or save money for a new car - the sooner you set your financial goal and start to save, the better.
The best way to decide on your financial goals is to do it as a family. Get the family together, sit down with them, and talk about where you see yourself in 5, 10, 15 years and so on. Decide what's important to you, determine when you need it, decide how much money you will need each month to dedicate towards it, and finally set a place in your budget to extract that amount of money for your goals.
The process will go even smoother if you can somehow manage to save the money before you get your hands on it by having the money deducted directly from your paycheck and placed in either your bank account or some other financial account at your disposal.
Without setting a financial goal, you forget to put it in your budget, and the money just seamlessly slips out of your pocket leaving you without the financial resources when you need them.
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