During the budgeting process, you may uncover opportunities and areas requiring improvement. For instance, through the process, you become aware of the total amount of money spent on credit card payments. This awareness pushes you to set a financial goal of repaying those credit cards off within a year. Or you decided you needed an emergency fund and discovered you could cut back on coffee and allocate the money towards the fund.
Budgeting helps you uncover some financial goals. Financial goals are monetarily quantifiable aspects of your life. They are things that can be purchased such as goods, experiences, and education. These goals are also specific like as savings goals, home ownership, student loan freedom, or a worldwide trip.
Examples of Financial Goals
- $1,000 in an Emergency Fund
- $10,000 for a home down payment.
- Payoff $5,000 in credit card debt in 2 years.
- A 7-day cruise costing $1500.