The first step to achieving your dreams is to put some financial objectives into place.

Financial goals can keep you on track to save more and live better, no matter what age you are.

Short-term financial goals are ones that you can achieve in a year or less. They may include saving for a holiday or home improvements. Long-term goals are ones you expect to achieve after five or more years, such as saving for your children’s university education, a down payment on a house or retirement planning.

In your 20s – at this age most people are starting up the career ladder, earning real money for the first time. Your short-term goals might include building up a good quality working wardrobe, buying home appliances or saving for a getaway. In the medium term, you might be saving for a car, while your long-term goals could include saving for a down payment on your first home.

In your 30s – you might be in a relationship and you may have children, or be planning to start a family soon. Perhaps your short-term goals are saving for your wedding, or making home improvements, and long-term goals might be saving for private schooling for your kids.

In your 40s – you reach your peak earning power in your forties, and once again your goals have probably changed. In the short term, you may want to save to renovate your home, especially if your kids are reaching their teens and need more space and privacy, while in the long term you may be planning to send your children to university.

In your 50s – if your children are leaving home, you may be moving to a smaller property now, which might free up money for your superannuation. Short-term goals might include a holiday for just the two of you. A key long-term goal now is retirement planning, so you can sustain your current lifestyle.

So how do you achieve your financial goals?

* Define what you want – get a clear idea of what you want to achieve and when. For instance, ‘a family holiday in 2011’ is too vague. ‘A seven-day holiday at Happy Campers Resort in September 2011’ gives you an amount to save and a timeframe in which to do it. Without specifics, it’s difficult to know if you’re making progress.
* Live within your means – if you can’t live on what you earn, there’s no way your can save for any of your short or long-term objectives. You either need to curb your spending somewhere, or you need to earn more – that’s where Tupperware’s earning flexibility could be invaluable!
* Save first – set up a direct debit that funnels up to 10% of your after-tax income into separate savings or investment accounts. You won’t miss the money and it will quickly build up towards realising one of your goals. Perhaps you could commit to one extra party a week as your ‘savings party’. $140 per week into a savings or investment account will quickly add up.
* Assess your progress – check if you’re on track at regular intervals, so you can adapt your savings strategies.

What one extra party can do…

You can take the first step in achieving your financial goals by holding just one extra party a week (earning $140, based on the national party sales average). If this income was contributed to an average mortgage of $350,000 at 6% interest, your 25-year mortgage would be paid off in only 16 years (that’s right – nine years earlier than planned) and you’d save $133,000 in interest!

Safe and sound

There are a number of options that offer you higher interest than a standard savings account. Generally, the longer you are willing to lock away your money and the greater the risk you’re willing to take, the better the interest you’ll earn.

For short-term goals, ask your bank or financial adviser about money market funds, where you must give the bank 30+ days’ notice to access your money. For long-term goals there are savings plans portfolios for children’s education and super funds for retirement.

Should you invest?

Some people speculate in exotic sounding investments, but that may not be the best strategy for you, says financial adviser Zuraida Ariffin. It is important to have your current financial position reviewed and your cash flow analysed, to ensure that you will be able to meet your goals.

“Many people are under-insured. If something happens to you, your family will be in a better position if you have adequate income protection or life insurance, rather than $20,000 in investments,” she says. “It might also be a better strategy to make bigger repayments into your mortgage, so you pay it off faster. That’s where a financial adviser can help you formulate the best plan for your circumstances.”

Zuraida is an Authorised Representative of Matrix Planning Solutions. The Financial Planning Association of Australia has around 12,000 registered members. To find a financial planner, visit www.goodadvice.com.au or call 1300 626 393.