Creating your financial foundation while you are still young

By Lauren Elkins

For the Deseret News

Published: Wednesday, June 18 2014 12:00 a.m. MDT

Keep your focus at a high level, the big picture and not the day-to-day ups and downs of the market

With the interest rates as low as they are today, this also affects the return you may receive on your savings account. It won’t be able to keep up with rising inflation so it may be worth it to take the risk of investing so that your money can at least keep up, and perhaps, even grow faster.

While I did invest in my retirement account, I didn’t start investing in index funds and individual stocks until my 30s, but I spent time learning by asking the experts, reading online and reading financial books. Since my first stock purchase, it’s been exciting and terrifying to check my investments and thankfully, watch them grow.

Setting goals

Know what your financial goals are. Experts suggest assigning them into three categories: needs, wants and dreams.

Needs: These are non-negotiable costs: rent or mortgage, utilities, building your emergency fund, paying off student loans, paying off credit cards and saving for retirement. If you’re planning for or have started a family, you may also include insurance (health, home, life and auto), and saving for children’s educations.

Wants: These are important, but they don’t have a due date: vacation, a nice car, buying a home, or remodeling the kitchen.

Dreams: These are further out in time: early retirement, a cabin, a boat, or an elaborate vacation.

Understanding your financial goals will help you put together a picture of your financial life and set up a plan to meet your goals. If you don’t have that plan, you won’t know the correct steps to take, you won’t see whether you’re moving towards or away from it, and you won’t be successful.

Then, once you have the plan set up, the hard part really starts: sticking to it.

Lauren writes randomly on her blog, tweets periodically about who knows what, and spends her regular days conversing with computer programmers. By the time she gets home at night, she is mighty happy to see her husband and son.

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