You can meet your financial goals! Believe it or not, no matter what your major, your education at UConn has already given you practice in the basic skills you need to get ahead. You already know how to:

• Research data
• Analyze and organize information
• Develop goals and plans to achieve them
• Assess and report outcomes

Now you are ready to get started!

Developing Goals

You need to be clear about what you want out of your money. Follow these steps to clarify what your financial goals are:

Brainstorming

This is the first step in creating the financial life you want. What are your goals, ambitions, and dreams? To begin, jot down your desires for your future in various areas such as:

• Career
• Education
• Financial
• Personal Growth/ Spiritual/ Emotional
• Physical/ Health
• Social/ Family
• Property/ Material Possessions

Write EVERYTHING that comes to mind. Do not make any judgments at this stage.

Take the time to do more than one brainstorming session and you will have a good basic list.

Visualization

Picture yourself accomplishing each wish you wrote down in the brainstorming process.

Summarizing

For each item you identified, write 1-3 sentences to summarize what you would like to accomplish. Include as much detail as possible about what you want to achieve.

Now think about whether or not there are financial components to your goals (e.g., a desire to get an MBA would require funds to pay for that degree).

Identify Resources

Identify resources and/ or any assistance you would need to achieve each goal. Be specific. Do some research and find out what, exactly, it is that you will need. Clear and concise goals lead you to committed action.

Prioritizing

For each goal you identified, prioritize based on:

• Needs/ Must haves
• Wants/ Nice-to-haves

For each goal you specified, select a time-frame:

• Immediate: to achieve in less than a month
• Short-Term: to achieve within a year
• Long-term: to achieve within 5-10 years or longer

Review your list again. Now choose 2-3 financial goals and proceed to the next step.

Financial Planning

Make a plan. This process begins with the assessment of income and expenses described in Personal Financial Plans. Your long-term financial plans needs to be worked out step by step so that you’ll know what it will take to reach each goal. Define your priorities for your financial goals. Take action until your goals become a reality. When you first start out, most of your financial goals may be long-term, taking over a year to achieve. No matter what your goal or timeline, here is a way to get started:

Identify your goal

Assess your current financial situation before setting goals.

Include timelines and make sure it is measurable and reasonable. See "Developing Goals" in the section above.

Research and brainstorm

Think of as many ways as you can to meet your goals

• Spend time to gather and evaluate data from different sources
• Double-check any timelines – Are they realistic?
• Double-check needed resources – Have you included all you will need?
• Develop a Personal Financial Plan to assist in this process
• Be realistic. You need to honestly evaluate your financial situation and then determine what you can do REALISTICALLY in terms of meeting your financial goals. Setting financial goals that are attainable means that you have to take a brutally honest look at your financial situation.
• Use several strategies to accomplish a single goal.

List shorter-term objectives

Take mini-steps: Break a long-term goal into several shorter-term goals. These are the "baby steps" you will need to accomplish to meet each long-term goal. Since it is difficult to plan objectives over a long time period, start by identifying the first step(s).

Make sure your objectives are specific, measurable, and include timelines

For example, if “Pay off $5000 student loan within 5 years” is your goal, some shorter-term objectives could be:

1. Within 3 weeks develop a Personal Financial Plan to identify how much extra money exists to apply to the loan balance
2. Each month afterward, apply $x in addition to the minimum payment to pay down the principal
3. In one year, if salary increases and PFP allows, add $x more to pay down the principal

Execute your plan

Once you have begun to enact your financial plan to achieve your goals, you will need to periodically assess your progress towards your short-term objectives. Do this at regularly-scheduled intervals so you’ll know whether you are on track or not.

If your short-term objectives are met, determine if you are getting closer to accomplishing your long-term goal:

• If you feel you are making progress, congratulate yourself! Your plan is working!
• If you don't think you are closer to achieving your longer-term goals, go back to the Financial Planning stage and re-assess those short-term objectives.

If you are falling short of your short-term objectives, determine why:

• Do I need more information/ resources to achieve my objectives? How I can I get these?
• Do I need to modify my objectives?
• Do I need to insert another objective/ additional step before I can begin making progress?
• Stay alert to hazardous detours (e.g., "going along with the crowd" rather than sticking to your own plans and values).
• Enlist support from your family or friends.

Review your goals & priorities

After a longer period of time, review the list of goals and priorities you made and ask yourself:

• Are there any wishes I need to add to my list?
• Are my needs, wants, and priorities still the same?
• Am I making progress?

Revise your plan

Your financial goals are always a "work in progress" and subject to change.

Tips for achieving specific goals

Below are some tips for achieving some common long-term financial goals. You may also find information about these topics in Saving and Investing.

Goal:"I want to pay off my student loans."

• Research available repayment options

Know the true cost of each option, including consolidation

Use repayment calculators such as those on http://www.mappingyourfuture.org/paying/standardcalculator.htm

• Find out if interest rate can be lowered for automatic withdrawal or a certain number of on-time payments
• Develop a Plan!
• Always pay on time
• Don’t get discouraged: In the beginning, most of your loan payment will be applied to owed interest.
• Apply extra money on a regular basis to pay down the principal faster and decrease interest paid over the life of the loan

Goal:"I want to save for a new car/ house/ vacation/ etc..."

• Research various savings vehicles including:

Traditional Savings Accounts

Money Market Accounts

Certificates of Deposit (the other CD)

U.S. Savings Bonds

Mutual Funds/ Stocks

• For each account type compare:

Interest rates

Risk and volatility

Timelines

Access to funds/ Penalties for early withdrawal

• Develop a Plan!
• Commit to making at least one monthly contribution toward your savings goal

Goal:"I want to save for retirement."

• Research various retirement savings plans including:

Employer-sponsored plans: e.g., 401K, 403B

Will your employer match your contributions?

Individual Retirement Accounts (IRAs)

Traditional IRA versus Roth IRA

Plans for the self-employed: e.g., SEP, SIMPLE IRA

Mutual Funds/ Stocks outside of a retirement plan

• For each account type compare:

Investment choices offered under each plan

Pros and cons of pre-tax versus post-tax contributions

Rates of return over various time periods

Risk and volatility

Timelines/ Access to funds/ Penalties for early withdrawal

• Develop a Plan!
• Commit to making regular contributions toward your retirement savings goal

Other Resources

• http://www.smartaboutmoney.org/A compilation of materials on many financial literacy topics
• Choose to Save Information, tips, and calculators
• Mapping Your Future “Undergrad,” “Grad,” and “Student Loan Borrowers” sections
• http://www.mymoney.gov/ A website developed by the US Financial Literacy and Education Commission that provides information and resources on wide variety of topics

SIMPLE IRA: A Savings Incentive Match Plan for Employees (SIMPLE) account is a type of retirement savings account for employees offered by employers.Bonds: When you buy a bond, you're lending your money to a company or a government entity so it can grow. The the company or agency selling the bond promises to pay you interest and to return your money on a date in the future.CD: When you buy a Certificate of Deposit (CD), you promise that you're going to keep your money in the bank for a certain amount of time. There are penalties for withdrawal of funds prior to the maturity date.Interest: This is the additional amount you will pay to a lending institution to borrow money. In terms of savings, interest is the additional amount you will earn for having your money in a bank account or other savings vehicle.IRA: An IRA (Individual Retirement Account) is an investment vehicle for retirement, usually set up through a financial services company or bank.Minimum Payment: The minimum monthly payment required on a credit card or loan. For credit cards, this is typically 2% of your balance (changes month to month).Money Market Accounts: These accounts tend to offer higher interest rates than savings accounts, but lower rates of return than other savings vehicles (e.g., bonds, mutual funds).Mutual Funds: A mutual fund is a pool of money (fund) run by a professional or group of professionals who have experience in picking investments.Principal: The amount you borrow on a loan before interest is calculated. When interest is capitalized, it is added to the principal balance.SEP: A Simplified Employee Pension (SEP) is a retirement savings account for small businesses and for self-employed people (people who have their own businesses).Stocks: When you buy stock in a company, you share in its ownership. Stock is purchased units called "shares." Your share of the company depends on how many shares of the company's stock you own.