Establish Financial Goals
Well-thought-out goals can help you direct your dollars to those things
you consider most important. Make a list of your important financial goals.
Include short-, medium-, and long-term goals, as shown in Figure 2-2. For
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a new car or future education are long-term goals that require saving over a
period of time.
Goodheart-Willcox Publisher
Figure 2-2 Organizing your goals on a chart similar to this can help direct your
spending and saving to whatever is most important to you at a given time.
Financial Goals
When Wanted Estimated Cost
Short-Term
Boots
Holiday gifts
Summer trip
In 2 months
In 3 months
In 9 months
$ 65
$ 100
$ 350
Medium-Term
Laptop computer
Used car
In 1 year
In 2 years
$ 500
$ 6,000
Long-Term
College expenses In 5 years $32,000
Economics in Action
2008 Recession
When the 2008 recession hit the US economy, the impact was felt in millions of
homes across the country. Many young adults still struggle to find work. Businesses
stopped hiring, and many employees lost their jobs. Demand dropped and growth
came to a near standstill. Financial institutions made fewer business and consumer
loans. Credit sources dried up.
When people lost their jobs or had their hours reduced, entire families suffered.
Long-term goals, such as higher education, starting a business, and buying a home,
had to be put on hold. Many unemployed people lost health insurance that was
provided by employers. Unemployment led to many families losing their homes.
Loss of income meant lifestyle changes for almost everyone. There was less
money and much more anxiety. Retirement savings dropped with the stock market
and home values. People who were retired or nearing retirement were forced to
work beyond their planned retirement age, if they could find work.
Recovery from the 2008 recession has been slow and is still in progress. Global
economic problems contributed to the recession in the United States and continue
to impact the economies of most nations.
Section 2.1 Your Personal Financial Landscape 35