What would you guys consider sufficient financial goals if, let's say, one just happend to start working on saving?
What would be your first goal? second? third and beyond?
The original question from the OP is above.
For the sake of our general audience my comments will be a bit more casual than some of the others.
"What would you consider sufficient financial goals?...(re saving and then what?)
I tell my kids and grandkids the same thing when they ask me how I was able to save enough to retire before age 55. My answer boils down to this:
"Save as much as you can without hurting your family or youself and put it into a Money Market fund as you save it. Once you have enough to buy 100 shares of a stock or better yet an index fund at Vanguard then do so. Repeat often."
Goal number 1 should be an emergency fund to tuck away at least 3 months of actual living expenses that cannot go unpaid (mortgage, power bill, water bill, phone bill, food, insurance, car payment on PRIMARY car and perhaps some other stuff that is essential. Don't include the cable or dish TV or the top of the line mobile phone plans. These can be cut back a lot and still have essential services.
Goal number 2 should be to continue to save even when you meet your 3 month goal but start moving a portion of these savings into a fund of your choice where you can use it as a collector of money that is easily moved to other accounts without commission or fees. These are usually Money Market accounts. Continue to fund the emergency account until you are up to at least 6 months of living expenses. Then take the extra funds in the MM account and buy additional index funds in different market sectors.
Goal 3 is to funnel all raises, bonuses etc. into the MM fund to use as seed money for other assets. Buy wider variety of funds including some intermediate bond funds, international funds, Pacific Rim funds, Europe funds, and even some "tree hugger" funds if that suits your taste. The key is to keep your money flowing into index funds with low expenses and to keep them in different sectors. Repeat as desired.
Goal 4 may be to see how much you want to spend each year in retirement and then do the calculations on what it will take in a nest egg to get you there and when that might happen. FIRECalc is a good tool for this exercise. Once you have your "magic number" you can then see how long it might take to get there. If you can save more it will shorten the time but do so with full knowledge and consent of all family member so there will be no surprizes when the answer to taking that Alaska cruise is now NO.
Goal 5. Once you have enough plus a health margin in hour now diversified funds. Leave your job and live on your funds. That is a very tough step for many to take. No longer getting a paycheck takes some getting used to and can be a shock for some. Also, you will not be saving anymore so the concept of reversing the cash flow from you to the MM will now change.
Goal 6. Live long and prospher. Do those things you have always wanted to do but never had the time. Because now you have the money AND can take the time to do them. Don't delay too long or health issues might slow thing down or even prevent them from happening.
I tell my kids............" the worst thing I can think of having to encounter on my death bed is the fellings of remorse at not doing the things I wanted to do because I ran out of time. " Having lived through the death of my wife so soon into her ER only gave me more resolve in my desire to do all I can before I can't.
I don't want to be dying and think...."if only if I had done..........."
Do it now.