“If you don’t set goals, you can’t regret not
Did you know that four of the top ten New Year’s Resolutions are related to money and finance? What wasn’t
accomplished last year—or even the year before that—we optimistically and firmly resolve to do in the new one.
That resolve will not fade if you take the important next steps: setting your goals —life goals — and developing
specific strategies for achieving them.
Some benefits of setting goals are:
• Goals give you a target to shoot for. Even if you don’t quite reach your goal, chances are you will do much better
than if you had no goal at all.
• Having a clear vision and knowing the direction you want to go will also help you stay on track toward your goals
when the inevitable setbacks occur.
• Another benefit of setting goals is that the process can bring families together as they work toward a common
Establish your “life” goals first. If you are not sure of what your life goals are, try answering the following questions:
• If you had all the money in the world, what would you do?
• If you were going to be healthy and live for only 10 more years, what would you do?
• If you were going to die in 24 hours, what would you regret not doing with your life?
Once you’ve determined your life goals, you can then determine your financial goals to support your vision.
Knowing and keeping your life goals clear will enable you to organize and prioritize your financial objectives.
Examples of goals with different priorities and time frames are shown in the following grid. By placing your financial
goals in the appropriate quadrants,
financial strategies can then be Goals Have Different Timeframes and Priorities
developed that support your long
and short-term goals. For example,
a strategy for a financial goal that has WANT TO NOW WANT TO LATER
a high priority and a short time frame Goal: Second Home Goal: Meaningful Legacy
is to invest in low risk investments. Objective: Grow Assets Objective: Aggressive Growth for Assets
You can afford to take bigger
investment risks when the goal has a
longer time frame. With your goals HAVE TO NOW HAVE TO LATER
Goal: Cash Flow for Lifestyle Goal: Retire/Slow Down Career
prioritized, you will then know how
to allocate your cash flow between Objective: Protect Against Loss Objective: Grow Assets & Protect
investment and spending. Against Losses
If we can provide guidance or NOW LATER
assistance to help you through this
process, please contact us. For Each Goal, a Portfolio is Targeted to
Address Specific Growth and Risk Needs
SEI NETWORK 13
By : Tonya Mathison January, 2008
Cash Flow Management Goals
The beginning of the year is a great time to set up systems for cash flow management, in other words— the
budget. Like the word “diet”, the term “budget” has developed a negative connotation, in that it keeps you
from doing what you really like to do. However, a budget or cash flow management system simply means
allocating specific amounts of money for a particular purpose.
Once set up, when you use and monitor such a system, you will know that you are taking the necessary steps
to accomplish your long-term financial goals which directly correlate with your life goals. It will give you the
knowledge you will need when its time to make important life decisions. What if life throws you a curve
ball? What if you lose your job, or would like to retire early? Using a spending system facilitates important
communication within families. Communicating with your family about money is one of the most important
lessons you can teach your children.
Right now is a great time to review what was spent last year in various categories. This will be a helpful ref-
erence for setting up your spending targets for 2008. The next step is to keep track of your spending for one
month. Our suggestion is to chose a method that works best for you. Use a system that you will enjoy using.
If you are a paper and pencil person, use a note book. If you like spreadsheets, use Excel or if you like to use
customized software, we recommend Quicken. If you’d like help with a recommendation that is right for
you, we are happy to assist.
A major factor in any system you choose is the categories for spending. You can name them what you want,
but stay consistent with the names. Use the same categories each month. For your reference, enclosed is a
cash flow category listing. If you prefer to have an electronic copy of this, send an email to the address be-
low, and we can email it to you.
After the first month of tracking, total each category and continue to record your spending for another month
so that you can compare monthly totals. Usually after three to four months, you can annualize the amounts
to set realistic spending targets for 2008. You will then be able to make easier and better decisions about
spending because you know you have the money earmarked or set aside.
Next month, we will focus on financial record-keeping requirements and organization. Do you know how
long you should keep tax records? Find out in next month’s letter.
Questions or comments? We welcome your feedback. If you prefer to re-
ceive this electronically, please forward your e-mail address to:
Goldstein Munger + Associates
18 Crow Canyon Ct, Suite 250
San Ramon, CA 94583