While in the secondary education program at North Park University, I assisted an English teacher in a nearby high school. One day, he asked me to give a short lesson on the importance of following the writing process (i.e., pre-writing, writing, revising, editing, and publishing) to achieve the optimum final draft.
I went into the classroom that day wearing a tie with a windsor knot and asked the class for a volunteer, someone who did not know how to tie a tie. A student came up and I handed him a tie. I told him to look at mine and try to make the same exact knot with the tie I had just given him. After producing a lumpy knot around his neck, I had him untie it, then gave him a step-by-step set of instructions. A minute later, he had a windsor knot of his own.
We all have goals: we dream about achieving them and can maybe even see them when we close our eyes. But without a plan or the proper process, we might end up with something akin to a lumpy knot around our necks.
Financial goals are no different. You can see them, name them: save for a down payment on a house; max out IRA contributions; eliminate credit card debt. But how will you get there? You could just put whatever extra money you have towards your goals and hope it’s enough. Or, you can create a budget: have a plan for all your income and control your expenses to effectively set aside enough money to reach your goals.
If you’re not sure how to create a budget, check out our article: What should your budget look like? Of course, if you have any questions, feel free to leave us a comment. We’d be happy to help!