This is a guest post by Bucksome, a baby boomer trying to make the most of her money while saving for retirement. Read more about her at Buck$ome Boomer’s Journey to Retirement. Subscribe to her RSS feed to follow new posts.
The common goal all people have when managing money is financial success. But what does that mean? The dictionary definition of success is “the favorable or prosperous termination of attempts or endeavors.” Adding the adjective “financial” would mean positive results pertaining to money matters. There are many ways to measure monetary outcomes.
When I made the final car payment recently (six months early) it was a great feeling. Not as good as those who get to call up Dave Ramsey on debt-free Fridays but nice nonetheless. Reducing the debt load or eliminating a payment can be success to those with outstanding obligations.
I have short term and long term goals related to debt ranging from paying off consumer debt to burning the mortgage.
A second way to measure financial progress is savings. There are all kinds of vehicles people use to save ranging from emergency funds to retirement plans. You’ll see many personal websites with various savings tickers.
If you are out a debt, the next financial goal should be a fully-funded emergency fund. Daniel’s written about his goal to fund a $5,000 emergency fund. Saving for retirement will most likely be continual during working years.
If you have no debts and have met savings goals then net worth is the another way to measure financial progress. You’ll see blogs that regularly update the author’s net worth figure. The problem with this method is that it can be volatile.
Just ask anyone who owned real estate in Michigan, Nevada or California the past few years or invested heavily in the stock market. We saw a plummet in net worth which is still recovering.
Meeting your monetary goals however measured is what counts. For us, financial success will be a comfortable retirement with no debt and more than enough savings. I hope to see you there too!