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There are three types of savings goals you should set for yourself. The first is your long-term goal, the second is your short-term goal, and the third is your actual savings goal. By setting three goals rather than just one, you will be more likely to achieve your financial objectives.

The long-term goal is the amount you will need to save for a cer- tain event, be it your child’s college education, a new house, or a new car. Most often, though, the long-term goal is saving for retire- ment. Through your financial plan, you and your advisor have estab- lished just how much money you will need to live the way you want to during your retirement. It’s this lump-sum number that is now your long-term goal. However, if you were just to strive for this long-term goal, what would be the chances that you would reach it? If you were told that you needed a lump sum of $750,000 in today’s dollars, would you honestly have the ambition to save that much? Probably not. Setting large, long-term goals is great, but they are best met by breaking them down into smaller, more attainable goals.

Your short-term goal is what your long-term goal breaks down to on an annual or monthly basis. Let’s say that you and your advisor figure out that if you want to retire in 35 years, you only need to save $15,000 per year, or $1500 per month. That certainly sounds a lot better than any lump-sum amount your advisor will tell you, doesn’t it? Smaller numbers are easier to attain because they don’t seem so far out of reach. If you have figured out that you are able to save $3000 per month after all your expenses, then putting at least $1500 away each month for retirement shouldn’t be difficult.

Your actual savings goal is the amount of money you can and do put away for your retirement on a monthly basis. Just because you say you can save $2000 per month doesn’t mean you will do it. Your actual savings is determined by how much money you really do put into your investment accounts. This number may fluctuate a bit in the beginning, but by establishing a systematic savings plan, you will be more likely to stick with it.

Once you have determined your long-term, short-term, and actual savings goals, start acting on them! Most investment firms allow you to invest on a regular basis directly from your checking or

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