How to Meet Financial Goals

Your training to live a healthy financial life began in our first article, and you may be coming to realize that your budget is more out of shape than you thought. Like reading healthy recipes and counting calories to develop good eating habits, tracking your spending is the first and most important step toward achieving your financial goals.

You may conclude that saving for retirement is a higher priority. Or that saving for your children’s’ college is most important. Perhaps buying a house is part of your plan. Setting up your estate planning should surely be. Regardless, you are ready to begin meeting your goals.

Start with making a list. This list is your map, showing you where you are now and where you want to go. Your possible goals and how to achieve them:

Save for retirement. Not everyone will save millions of dollars for retirement, but you can probably save more. The simplest way is through an employee-sponsored retirement plan such as a 401(k) or a 403(b) if you work for a school or tax-exempt organization.

Many employers offer a match of up to a certain percent (such as 5%) of your contribution – free money that can really add up.

Setting aside even a small amount each month can make a big difference, years from now. Let’s say you’re now 30 and you save $2,000 a year for 10 years. Assuming an average return of 8%, you’ll have $198,422 at age 65.

Here’s a cool tool from Bankrate to show what compounding over time does for your savings. Two of our other favorite tools are Kiplinger’s retirement savings calculator and the T. Rowe Price income calculator.

By socking money away early, you also get in the habit of saving and allowing time to reinvest your dividends and interest earned.

Save for college. Most states and some private institutions sponsor college savings vehicles known as 529 plans. Among the benefits:

  1. Contributions grow tax-free if used for qualified education expenses.
  2. You may be able to write off contributions on your state tax return.
  3. The money is outside of the grantor’s estate, meaning you may continue to control who the beneficiary is and how the dollars are invested.

Great resources for learning more about saving for college and a review of good 529s include “The Best Way to Calculate College Costs” and “The Best 529 College Savings Plans: Reviews and Ratings.”

Source: Thinkstock

Source: Thinkstock

Create basic estate planning documents. In my article “Estate Planning: Three Things You Need Besides a Will (and why you need a will too),” I explain the five basic estate planning documents everyone needs regardless of wealth: a will, beneficiary designations, financial and medical powers of attorney and an advanced medical directive to appoint someone to make decisions about your health care if you can’t.

A great resource for these forms is

Buy a house. The biggest hurdle first-time homebuyers face is the down payment. But if you’re like many people, it’s attainable.

To start, you need to know how much mortgage you can afford.’s affordability calculator  helps determine how much house you can afford based on your income, monthly debts and planned down payment.

Accumulating that down payment may mean seriously cutting your spending. To save $20,000 in two years, for instance, you need to put aside $833 a month. Now that you track spending, you know what you can go without to redirect that money to your new home – and acknowledge that you may need to extend the savings time depending on what you can realistically put away.

You may also qualify for assistance with your down payment and closing costs. To learn more, go to the Down Payment Resource Center.

Hire a financial advisor. Knowing what to do and when can be challenging, especially if your financial situation is complicated or you want a professional with the financial expertise to lead the way. Advisor classifications and credentials include:

Now you know how to help yourself establish and accomplish your financial goals. Next we look at what insurance coverage you need for yourself and your family.

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Barry Glassman, CFP, is the founder and president of Glassman Wealth Services, a fee-only investment management, financial planning and wealth management firm in McLean, Va. He has been honored with just about every Top Financial Advisor Award from the financial planning industry and his peers in publications including Barron’s, Investment News, Reuters, Washingtonian and Virginia Business. He is a contributing writer at and Investment News. Follow Barry on Twitter at @BarryGlassman. His website is

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