Saving and Investing: Defining Your Goals
While money doesn't grow on trees, it can grow when you save and invest wisely. Knowing how to secure your financial wellbeing is one of the most important things you'll ever need in life. You don't have to be a genius to do it. You just need to know a few basics, form a plan, and be ready to stick to it. No matter how much or little money you have, the important thing is to educate yourself about your opportunities.
No one can guarantee that you'll make money from investments you make. However, if you get the facts about saving and investing, and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money.
You can do it! It's easier than you think.
No one is born knowing how to save or to invest. Every successful investor starts with the basics. A few people may stumble into financial security—a wealthy relative may die, or a business may take off—but for most people, the only way to attain financial security is to save and invest over a long period of time.
Time after time, people of even modest means who begin this journey reach financial security and all that it promises: the purchase of a home, educational opportunities for their children, and a comfortable retirement. If they can do it, so can you!
Define your goals.
What are the things you want to save and invest for? Here are some possibilities:
- A home
- A car
- An education
- A comfortable retirement
- Your children
- Medical or other emergencies
- Periods of unemployment
- Caring for parents
Make your own list, and then think about which goals are the most important to you. List your most important goals first.
| What do you want to save or invest for? | By when do you want to do this? |
|---|---|
| 1. ________________________________________ | ________________________ |
| 2. ________________________________________ | ________________________ |
| 3. ________________________________________ | ________________________ |
| 4. ________________________________________ | ________________________ |
| 5. ________________________________________ | ________________________ |
Decide how many years you have to meet each specific goal, because when you save or invest you'll need to find a savings or investment option that fits your time frame for meeting each goal.
Many tools exist to help you put your financial plan together. Here are some examples:
- You'll find a wealth of information, including calculators and links to noncommercial resources, at Link opens in a new windowhttps://www.investor.gov (scroll down to "Financial Planning Tools" toward the bottom of the homepage).
- The American Savings Education Council (ASEC) has several financial tools at Link opens in a new windowhttps://www.asec.org/tools-1.
- The Financial Industry Regulatory Authority (FINRA) has several calculators and tools at Link opens in a new windowhttps://www.finra.org/investors/tools-and-calculators.
- The Social Security Administration has a calculator to help you plan your retirement: Link opens in a new windowhttps://www.ssa.gov/prepare/plan-retirement.
U.S. Securities and Exchange Commission (SEC). (n.d.). Dear reader [Excerpt]; Don't wait to get started & Your first step—Making a financial plan (pp. 1–5). In Saving and investing: A roadmap to your financial security through saving and investing (SEC Pub. No. 009 [06/11]). Retrieved June 21, 2024, from https://www.sec.gov