Let’s get back to some of the basics and start with creating financial goals:

Each of our financial goals is unique because of our age, income, dependents, and other personal factors, but the basic structure and how we determine and set financial goals are common for all of us. We all have daily necessities, monthly bills, and the need to prepare for future events. The specific items associated with our goals might be somewhat different, but this is where we all begin. Below is a very simplified or foundational list of financial goals.

Simplified Financial Goals
• providing for everyday needs
• reducing/eliminating debt
• saving

First on the list of goals is providing for our everyday needs and necessities like food, sundries, shelter, and transportation. These weekly and monthly expenses make up the bulk of our budget and can’t be ignored. If we had to, we could skip a deposit to our savings, but we can’t decide not to buy food one month.

Next on the list is debt, which would include credit card balances and loans. These payments can’t be skipped either. And last on the list is saving, which unfortunately tends to get the least attention.
If we take the simplified list above and add the specific items in each area, we see the framework for our financial goals. Below is an expanded list of financial goals with more specific items added.

Expanded Financial Goals
• Provide for everyday needs.
o food and sundries
o clothing
o housing
o car and transportation expenses
• Reduce/eliminate debt.
o credit card balances
o loans
• Saving
o Save a small amount as a cushion for unexpected bills like major car repairs
o Establish savings for an emergency fund. enough to pay for several months of expenses
o Save for retirement. long-term saving

Notice that the section for saving has been expanded into three separate items. The first is savings that is a cushion for unexpected expenses like major car repairs. The second is a rainy day account or emergency fund, and the last is a larger, long-term savings for when we retire or work in a reduced capacity later in life. These will be discussed at length in the chapters on saving.

Since we have to pay for necessities and make payments on debts, these items get the focus of our attention and affect all of our financial decisions. Saving gets the least of our attention because it is optional— or so it might seem.

If we continue to expand the “everyday needs” and “debt” lists above and include the amount of money associated with each item, we would have a complete list of where our money is going. This would essentially be our budget. Then when we include the amounts for our savings goals, we’ll have a set of personal financial goals from which we can establish our complete financial plan.