PUTTING TOGETHER A BUDGET

Setting goals takes effort. You need to think carefully about where you want to be financially, as well as what future plans you have that might be affected by your fnances. You also need to be reasonable and not set impossible goals for yourself. Take this process seriously, but don't panic about it you can modify your goals as time goes by.

For the longest time, our society considered 65 the “normal” retirement age. This stemmed from a decision by the federal government in the 1930s to begin Social Security payments at that magic age. Since then, much has happened to turn the conventional wisdom about retirement on its ear.
For one thing, people are living longer. The average life expectancy back in the 1930s was 64; today, according to the National Center for Health Statistics, the average male lives to the age of 76.5, the average female to the age of 79.4. Perhaps more significantly, if a man reaches the age of 60 today, he can expect to live for nearly 16 more years. For a woman, that figure exceeds 19 years.

The following are the key elements that you need to consider to create goals that are both attainable and motivating.

You don't want "spend less money" as a goal because it's negative, and staying motivated by a negative goal is diffcult. Charting your progress is also diffcult how do you determine when you are spending enough less?

Instead, your goal should be something like "enjoy the freedom of carrying a debt load of only 25 percent of my takehome pay." That goal is positive and quantifable. Other possibilities might be "pick up the mail without being nervous," "feel that I am in control of my fnances," or "get to
a point where I can start investing so that more money is coming in than going out." These goals aren't as easily quantifable as the percentage-of-take-home-pay goal, but the point is to fnd something that keeps you motivated and excited about the process.

Budgeting isn’t about abstaining from the things you enjoy. It’s about developing the wherewithal to do these things more often. Is your favorite leisure activity travel? Dining out? Volunteering with civic and nonprofit groups? Identifying the activities that you and your spouse enjoy will allow you to specify the costs involved with your preferred activities. Do this, and you can incorporate these costs into your budget.
There’s an additional benefit here as well. If you and your spouse are doing the things you most enjoy, you’re more likely to build the strong bonds that are the basis of every successful marriage.

This may seem an odd question, particularly for couples just beginning their careers, but how you answer it can have both immediate and long-term effects on your budget and your financial assets.

Our parents and grandparents didn’t have to plan for a huge retirement nest egg; statistics told them they wouldn’t be around for very long following their retirement. The same is hardly true today, when the typical couple might need enough money to support themselves for about 35 combined post-retirement years. Clearly, financing your Golden Years requires a fair amount of gold.
Many people today covet an earlier retirement. They expect to remain vigorous and curious for several post-retirement decades, and they’d like to travel and explore new possibilities. Financing that active retirement requires expert planning over a lengthy period.

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