I don' t know what my financial goals are

[Goldy1]

I know it sounds silly as consider myself somewhat money savy and very interested in investing.

I don't know what my financial goals are. I saved a few grand in high school working part time which was my financial goal. I remember how I enjoyed having the goal and it made the going without my wants today easier.

I am married with one child(a one year old)
We save for retirement and I am frugal just b/c I know it's good to be to prevent future pain (ie not having an EF causing issues) and I don't need overpriced crap anyway. I like myself without it.

I guess I figure whatever I do it won't matter.

Early retirment>? ehh no matter how much I save I probably won't be able to afford healthcare unlesss it is overhauled. However, my dream is kind of to have me and my dh working part time one day so we can be together more.

Pay for my son's college? ehh I can't afford it for the most part,(maybe can help) but I can't control that high cost and his grandparents might help with it(not banking on it) I would do anything for him, but I never used my degree anyway.

keep buying cars with cash? done that. it's great, but not big a thrill

just venting

I feel like I can't really win no matter what I do. Improve my home? eehh value going down anyway.

[disneysteve]

I guess I figure whatever I do it won't matter.

What won't matter?

I feel like I can't really win no matter what I do.

What do you mean by "win"?

I agree that it is good to have goals. Otherwise, it is impossible to put together a plan. It is like getting in your car and driving with no destination in mind. How do you know which way to go? How do you know when to stop?

Financial goals can involve a wide variety of things from big things like retirement to moderate things like a nice vacation to little things like a birthday gift for your spouse. Financial goals can also involve a wide variety of timelines from long-term like retirement to mid-term like your next car purchase to short-term like your summer vacation.

I bet that you do have goals. You just don't think of them as such.

[bjl584]

I broke my financial goals into baby steps so I could focus more on them and not get overwhelmed or frustrated.

First, I wanted to save up for a home and buy a place of my own. Done

Then, I wanted to pursue my MBA to enhance my career options. Done, however I'm still waiting on the enhance the career part.

Next, I wanted to have more in my investment accounts than I owed on my debt. Done

Next, I wanted to get my investments to the 100K mark. Done

Next, I want to get my investments to the 250K mark. Still working on this one.

I also have several smaller goals that fall within the goals listed above such as add 1% to the amount that goes to my 401K annually, read at least 4 books a year on investing and/or business, be debt free in the next ten years, look for new charities and ways to help the community, etc.

As far as an ultimate goal, it's that point in time when I have no debt and my investments earn enough annually that I can walk away from my job so that I can go enjoy all that the world has to offer.

[Joan.of.the.Arch]

As long as you are taking care of the things that you know need to be taken care of, I think it is okay to continue saving without a specific goal in mind. Things will come along. For instance, maybe your child will have a particular interest that can best be developed if you have some money set aside. Maybe he (she?)will just eat up the piano lessons like no one you've ever heard of, or maybe he want to have private ball lessons through out the year. And maybe because you will see his sincere devotion, you will want to cater to his interest.

Similarly you may decide to send your child to a private school.

Or perhaps you will find you like traveling with your little family and want to set aside more money for that than you now would guess.

Maybe you will decide later to have another child and will want to add onto your house, even if now it is not at all in your plans.

Maybe five years from now your parents, in-laws, sibling, best friend (or whoever) will settle in an area far from you and you will decide that you want to be able to make three trips a year to go visit them.

Maybe you will have an idea for a great business and having some undesignated savings will be perfect to get you started.

Who knows? There are a million possibilities....things you might have no clue about right now. I think it is fine to save some money that becomes substantial even if you do not have solid plans for it now.

[disneysteve]

As long as you are taking care of the things that you know need to be taken care of, I think it is okay to continue saving without a specific goal in mind.

I think it is fine to save some money that becomes substantial even if you do not have solid plans for it now.

Good point. The one caveat is that if you don't know what you are saving for, it is hard to decide where best to put the money. If you are saving for something within 5 years, you want that money safe and secure like in a money market account or CD. If you won't be touching that money for 5-10 years, you may want a blend of cash, fixed income and some equity exposure. If you won't need the money for 10+ years, you probably want a more substantial equity position.

[jIM_Ohio]

My understanding is early retirement creeps up on people. Because of compounding the curve looks really far away, then all of a sudden you hit the steep part and 5 years later ER is a reality.

Just because you have cheap health care (from an employer?) now, does not mean you cannot have healthcare later (paid by you).

I have looked into this, and I pay more in mortgage payments now than a health insurance plan would cost.

Consider- now you need a family plan, in retirement you and spouse could either get separate plans or a plan without kids. If you are healthy, do do not need one with co-payments, just a HDHP with a deductable which prevents you from going bankrupt.

Take a vacation, maybe all work and no play is making life plain, and you need to get away for a week(end?).

[jefffou]

I think it is fine to save some money that becomes substantial even if you do not have solid plans for it now.

I think a lot of this comes down to personality types. There are many successful people in this world that do not plan, or budget. They don't know where they're going or how exactly to get there. In fact, they would rather take a beating than to sit down and labor over a zero-based budget.

However successful people, almost to the letter, generally exhibit certain habits. They spend less than they make. They look to better themselves. They shop for bargains. They know a good deal when one comes along. They help their fellow man when help is needed.

I believe that planning is better than not planning, but ultimately success is dependent on actions, whether planned for or not.

Jeff

[disneysteve]

My understanding is early retirement creeps up on people. Because of compounding the curve looks really far away, then all of a sudden you hit the steep part and 5 years later ER is a reality.

I think that is true because of the magnitude that the numbers take on.

If you have $1,000 in savings and it doubles in 5 years, that's $2,000. Not a big deal.

If you have $10,000 in savings and it doubles in 5 years, that's $20,000. Now you are talking about more significant numbers.

If you have $500,000 in savings and it doubles in 5 years, that's $1 million.

Suddenly retirement, early or otherwise, becomes a reality even though each example represents the exact same investment return.

[jIM_Ohio]

I think that is true because of the magnitude that the numbers take on.

If you have $1,000 in savings and it doubles in 5 years, that's $2,000. Not a big deal.

If you have $10,000 in savings and it doubles in 5 years, that's $20,000. Now you are talking about more significant numbers.

If you have $500,000 in savings and it doubles in 5 years, that's $1 million.

Suddenly retirement, early or otherwise, becomes a reality even though each example represents the exact same investment return.

I know why the compounding curve takes off
the issue is that you might not see it take off as much because contributions are high, then boom-boom-boom
7 years of X% returns and portfolio doubles then boom-boom-boom 3 years later that doubles or something like that- the last couple of doubles will come faster and faster based on money going in and couple of good performing years in the market.

[GREENBACK]

This thread does expose the importance of having a plan in place or at least smart short term objectives while you figure out your plan.

I, personally, am not a long range goal oriented person( except for retirement). I tend to save in the wisest way I know with anticipation of a number of life events happening. Many of these events have indeed happened. I'm probably similar to the OP except that I accept it and just try to make the wisest choices I can with my finances.

[wnlbutterfly]

I think what Goldy is feeling is that no matter what she does it isn't going to feel like enough or that it will matter in the long run. She is having a "bad money day".

Value of your home will come back up, it is only temporary, it might take 10 yrs, but it will happen (I have faith that people will still want a home to call their own). So doing little improvements to your home that YOU enjoy will be a benefit. I'm personally not worried about the value, as the value of having a home to me far outweighs what someone else says it is worth at the moment (of course I am not wanting to sell right now either!).

Okay, so you might not be able to hand Jr a check for college. Even if you could get some money saved to pay off a semester or buy a car before college would be a good goal also. Ironically, we went through on grants and never thought we would "make too much" for our kids to get grants...guess what....we do! We are still getting DD through school without loans though. It can be done even without a big 529 to hand them.

Don't worry about "early" retirement right now, just work on "retirement". Getting things set up to invest in it and relax.

I have days also where I feel defeated, I get a good start on the EF and then an expected bill comes in and feel like I can't win either, but you just have to keep moving forward. Just get the long-term goals set up on auto-payments and find a few short term goals that will be fun work towards.

When I am having a bad money day, I try to think of all the positives....DD almost done with college (and no student loans), we have two cars PAID in full, we have our home (first home for us). Right now DH has a job and I am working part time. I don't foresee being millionaires in this lifetime, but we are doing okay.

[Goldy1]

thanks guys. great advice here. I guess Steve is right too;a vacation can be a goal even if it's a beach getaway weekend.

it's just been a tough year here. I guess I need to realize I alread saw the fruits of one of my goals. We got through a bout of unemployment without a lot of fear due to our EF and cars paid in full. Not saying I had no worries, but not big enough to ruin my sense of well being.

I guess not being able to see the future is what I have to accept.

[snafu]

Goldy I read your post with sadness; apparently there are no challenges/adventures you are looking forward to doing. You are frugal by nature, but I wonder what would add excitement. Perhaps setting a goal of increasing your investments value by 5% or 7% in 12 months. Do you have an appliance replacement fund for fridge/stove/W/D? Would you consider taking some courses to widen your horizons? Will you ever return to the workforce?

Have you spent any time in another country? It would broaden your horizons and toddlers do very well adjusting to new environments.

[Penny Pincher]

A smart direction is to take advantage of any and all possible tax breaks for you and your family members.

For instance you can donate over $2,000 (the actual amount might be changing this year) to anyone you want tax free. So consider setting up some sort of account (bank, stock, CDs or whatever) for you baby now and you and your spouse each contribute as much as you can (up to the legal limit) every year.

[snafu]

Since goals aren't a motivator why not push forward with practical, Baby step finance in your comfort zone? What percentage of income is currently expended on 'Needs,' what percentage is used for 'wants,' what percentage of income is saved? Create your own Target for example... 50% Needs, 30% want, 20% savings.

Likewise consider baby stepping an investment plan by designating percentages for super safe/accessible like laddered CD followed by a Balanced Mutual fund [bond/dividend/equity]. When that feels comfortable you might begin to fund a modest risk, low cost Index fund.

Did your grandparents tell you stories about the Great Depression? Think of the economy as a roller coaster. Those who live in high COL regions were hit with wave after wave of financial problems exacerbated by greedy bankers. Those who live in other regions were barely touched directly. There was a fast fall 09-10 but the last 6 months it has slowly started the ascent.