Dreaming is good for you. It allows you to tap into your passions and live your best life. Once you get help with debt and take advantage of debt solutions, you have the freedom to create a financial plan that allows you to follow your heart. Try these tips to budget a path to your dream life.
Make a wish list
What dreams did you put off while you were consumed by debt management issues? Think about the items you've gone without, such as a new laptop, a long-awaited kitchen remodel or taking a vacation.
If it's been a while since you thought about fun purchases and you need some inspiration, think back to what impassioned you before debt dragged you down -- or tap into the kid in yourself and recall what excited you as a child.
Calculate potential costs and set goals
Do some research and determine the price tag of each of your dreams. Discovering the cost of a cruise or a flat-screen television makes the goals seem more real and clearly shows you how much money you need to save.
Prioritize your list
While it would be nice, it's probably not possible to tackle all of your dreams at once. Arrange the list in order of importance or feasibility and concentrate on the top two or three. For instance, you might find it fulfilling to tackle a more readily realized goal such as purchasing a new television set before booking a European vacation. If you have young children, an extra bathroom is probably more useful at this point than a sports car, for instance.
Determine a timeline based on your budget
Knowing the cost of your various goals allows you to set dates for when you'd like to achieve them. For instance, if you wish to buy a $750 laptop in six months and take a $2,500 overseas vacation in two years, you need to start setting aside $229 total each month now.
If you lack enough discretionary funds to meet your projected goals, you either need to delay the goals in order to draw out the required monthly savings and/or cut your budget. Waiting longer to reach your dreams and cutting back on discretionary income may seem like a drag now, but consider how satisfying it will be to fund your dreams with cash.
About the Author:
Julie Bawden-Davis is a Southern-California-based writer specializing in personal finance and insurance. Since 1983, her work has appeared in a wide variety of publications, including Family Circle, Ladies' Home Journal, Parenting, Entrepreneur and The Los Angeles Times.