Q If I had to choose one place to begin my financial planning, where should that be?
Kyle H., Minneapolis
Goal-setting. As with most things in life, you are much more likely to achieve your desired result if you have a clear picture of what that is. Spend some time determining exactly what you would like to achieve and write it down.
It can be as simple as saving $100 of each paycheck into your 401(k) or giving 1 percent of your income to charity. However, make sure your goals are specific and controllable. Setting a goal to earn 10 percent on your investments is not a good goal because you cannot predict the market. Wanting to buy a house in two years is not a good goal. A better goal would be to save $10,000 for a down payment.
Regardless of what you decide you'd like to accomplish, write these things down and keep them in a place where you will see them often. There is strange power associated with written words that makes people want to believe and follow them.
Good financial decisionmaking is based on understanding what you want to achieve. Good financial planners go to great lengths to understand exactly what it is you wish to accomplish. The most elaborate financial plan in the world is worthless if it does not align with your goals.
Joe Pitzl (24)
Q I'm thinking about buying a house and would like to understand the true cost of homeownership.
