3 steps to starting down a strong financial path

While money can’t buy happiness, it can lead to peace of mind for those who set and meet their financial goals. It’s when we’re current on our bills and have extra money that we think it’s OK to spend on something we may not need. Instead, we should consider saving more than our normal amount. After all, when an unanticipated expense comes our way, we can breathe easier because we have the money to pay.  
Follow these 3 guidelines to help set your financial goals: 
1. Do a little math 
Using some of your bank statements, write down where your money has been spent the past two months under categories such as “mandatory payments,” “recreation” and “eating out.” Decide which are easier to cut down, then set a goal to cut back in that area the following month. 
2. Long-term/short-term goals
Part of financial well-being is having both long- and short-term goals. What makes them different is timing. Short-term goals are smaller in dollar amounts with specific time frames. Long-term goals generally take more than five years to attain and rely on being committed to a saving and investing strategy. Common short-term goals include paying off credit cards and saving for household goods such as furniture or improvements or a down payment for a vehicle. A common long-term goal could be saving for retirement or a college education. Write down your goals and prioritize each item. Note your monthly progress toward your goals. These goals are in addition to your monthly expenses.    
3. Reality check 
Trying to save two-thirds of your monthly pay is simply impractical. Setting realistic financial goals requires being realistic. So be frank and choose a savings amount that motivates you. Saving money is one of life’s challenges. While it’s sometimes hard to pass up the temptation of a designer cup of coffee or shoes, curbing those impulses helps meet financial goals and builds a cushion for unexpected expenses.