Goals. Priorities. Dreams. Objectives. Call them what you may, but we all have things we want out of life -- things (or experiences) that make life worth living.
Whatever your ambitions, they probably involve money. And if you want your goals to become realities, you have to make sure you're sending enough money in their direction.
So, take five minutes to do the following exercise: First, write down your goals. (C'mon, do it. It'll just take a few minutes.) Now, write down how much you save each month toward those goals.
At this point, we have reached a crossroads. If you are saving specifically for a goal (e.g., contributing to an IRA in order to have a comfy retirement), then you need to make sure you're saving enough. A trip to our online calculators can help with that analysis.
However, if you aren't saving for a goal, it's time to reevaluate your financial plan. It takes active investing (as opposed to passive hoping) to ensure that you'll have enough money to pay for what's most important to you. Otherwise, you'll find other ways to spend your money -- ways that aren't as important to you, and on stuff that doesn't add much lasting value to the quality of your life. Ever feel like your wallet has sprung a leak? Then you know what we're talking about.
So, before you spend money on frivolities, send it to your priorities. Sign up for an automatic investment plan, where the money is transferred from your checking account or deducted from your paycheck before you can spend it. The money can be transferred to a money market account, a retirement account, a college savings account, an index fund, a brokerage account, or a dividend reinvestment plan. It all depends on your goal.
But make sure you do it. Any goal worth living for is a goal worth saving for.
For more ideas (along with lots of handy worksheets) on how to pay for your priorities, check out The Motley Fool Personal Finance Workbook: A Foolproof Guide to Organizing Your Cash and Building Wealth.