It's not enough to set financial goals, you have to set realistic financial goals and a budget you can actually keep. My first money blunder neglected this fact and set me back tens of thousands until I realized how to focus on the important financial goals and make a workable budget. Don't make the same mistake I did! Check out this presentation to meet your own financial goals. Check out the PeerFinance101 blog for more great tips on saving money, making extra money and investing. You'll find all you need to meet your personal finance goals. Read stories from others or share your own personal finance stories so we all learn together. http://peerfinance101.com/good-debt-bad-debt/

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Setting Financial Goals and a
Budget You Can Keep
The most important topics in personal finance and how to get back on track:
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Week 1 – Budgeting
I really believe budgeting and setting financial goals is
where it should all start.
Budgets are like diets. We all know that we need to follow
one and we all try from time to time. Unfortunately, we’re
about as successful at our budgeting as we are on our
diets. Why? Because we set unrealistic goals and don’t
build the support we need to succeed.

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Setting Realistic Financial and
Budgeting Goals
I was a financial mess in my early 20’s. I had just graduated college
with degrees in finance and communications, albeit delayed from
military service, and had landed my first real job as a financial reporting
analyst at a large insurance company.
I am a Type-A personality and love to plan,
so I started planning my financial future. I
got hooked on the idea of early retirement
and sipping piña coladas on a beach
somewhere. I set my goals high and when I
beat them, I set the bar even higher.
I was working a part-time job, socking
every penny of it away and learning
everything I could about investing.

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I was going to be rich!
Then came the emotional and physical crash from burnout.
Financial goals I had set were so high that it pretty much required non-
stop ‘til you drop.
I was the financial equivalent of a yo-yo dieter.
It isn’t enough to set financial goals, you have to set realistic goals.
Very few get rich quick in this life. The ones that try usually end up
back where they started, just like I did.
Use the four points below to set realistic financial goals and priorities
for yourself.
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1) Focus on the Big Four
 It’s helpful to create some kind of a timeline for your financial needs.
 The general answer for an emergency fund is at least three years of expenses
but after the last recession many are suggesting at least six months of
expenses.
 Don’t forget to add in inflation when figuring out how much education might
cost in the future.
 You won’t have all your current expenses in retirement, most people usually
budget around 80% of their current spending.
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 If you decide to save for your own home, be
reasonable about your needs. Will that extra
thousand square feet make you any happier or
can you be just as happy with a little less?
The important thing when budgeting is to write it all out. Make a promise to
yourself to meet your important financial goals
2) Be Prepared for Setbacks and Know how to Handle Them
Understand that things will come up that set you back every once in a while. As
long as it doesn’t become a recurring event that you could have easily avoided,
don’t beat yourself up too much when it happens.
Avoid high-risk investment schemes and do not commit more than 10% of your
total wealth to any one investment. Having a diversified portfolio of investments
can help from getting set back too far when the financial markets sour.
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3) Build a Support System
One of the most important ideas in budgeting and meeting your financial goals is
a good support system. Start a group that meets once a month to talk about your
financial goals and challenges you’re facing. At minimum, talk with a friend or
someone that’s not afraid to give you their honest opinion.
It was this idea that helped me get beyond my cycle of financial yo-yo dieting and
I highly recommend it to everyone.
4) Living for Tomorrow?
There is a limit to what you should sacrifice for your financial future. Life is too
short to be spending every waking hour planning for the future. Work happiness
into your budget so you can reach your financial goals and still live life!
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Building a Budget You can Keep
Budgets are tough to keep. The great thing about budgeting is that it really
doesn’t have to be forever. Most people set out with their budgets with no
timeframe in mind.
Start with a three-month plan. After three
months, reevaluate your expenses and
set a longer-term budget for maybe six
months. You will have formed some
great budgeting habits. Make it through
the six-month budget and you may find
that your habits are so well-formed that
you follow your spending plan without
even trying!
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 Take your money for savings out first! Figure out how much you need to save
to meet your financial goals and take that amount out of your budget first.
 List all your expenses on a sheet of paper without the amount – order your
expenses from most to least important. Prioritizing and thinking about your
expenses without looking at costs can really put things into perspective.
 Work through your budget – After these first two steps, work through your
budget from income to expenses.
It’s time to tackle budget basics:
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Consider saving a little more in the first month or two of your budget just in case
you missed a couple of expenses.
The bigger problem is what to do if you don’t have enough money to cover your
budget. That’s where your expense prioritizing comes in. If your budget shortfall
is something that is going to persist, you need to make more money. Whatever
you do, resist the temptation to cut back on your savings.
Set realistic financial goals and then follow a simple process on a budget you can
keep.
If you’ve got extra money at the end of your
budget, congratulations! Take some of the money
and set it aside to help meet your financial goals
but don’t forget to treat yourself as well.
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