Setting Goals

Although sticking to a budget can be hard work, achieving the goals you’re saving for will make it all worthwhile.

The first goal in budgeting is to make your expenses equal to—or better yet, less than—your income. You’ll know you’re on the right track when you’re saving at least 10 percent of your income every month and still have money left over to pay for something you’ve been denying yourself.

Different goals have different time frames, typically based on what the goal will cost. Short-term goals, like saving up for buying a new phone, may take three months or less. Medium-term goals, such as upgrading your laptop, may take three months to a year. Long-term goals, such as getting a car, going to graduate school, or eventually owning a home, take more than one year, sometimes many more.

No matter the time frame of a goal, your ability to reach it depends on how you manage your budget every day.

 

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