During 2009, in addition to timely articles on current financial topics, Boom! will have a series of articles focused on the basic bricks and mortar of financial planning, which we have dubbed "Financial Planning 101." There are two main reasons for these "101" articles: First, many people truly don’t understand some of the fundamental principles, terminology, strategies or products used in planning, investing, or insuring their financial lives. Second, many people who purport to understand the basics often stumble in their finances, due to violating those basic principles. We all know we need to eat right and exercise, but sadly we often don’t and need to have a refresher course.

Where do you start a series on Financial Planning 101? You start with your goals, of course. Why waste time on goals that are hard to define, difficult to express and that will probably change anyway? You define your goals because the purpose of financial planning is not just to engage in an academic exercise but to develop strategies designed to accomplish your goals.

OK, so where do you start this goal-setting process?

Start with a pen and paper and a quiet setting. If you are married, each spouse should do this separately, and then discuss their personal and shared family goals together. Don’t be afraid to think and dream big. This is not the time to think of all the obstacles in the way — that will come later — now is the time to let your imagination run wild. Think about the things that you really ought to do, those obligatory items, but also muse upon the dreams that are at your heart’s core, things that you must at least attempt to accomplish if your life is to have meaning. Finally, don’t forget to add in some goals that are just fun and will add to your enjoyment of life.

Now, let’s get back to the pen and paper. It is critical that you write down your goals, in as much detail as you can. Something magical happens when we commit our goals to writing. No, it doesn’t guarantee that you accomplish them, but not writing them down may well guarantee that you don’t accomplish them. Writing down your goals moves you from the dreamy world of imagination to the practical world of planning and implementation.

As part of this process, you may want to categorize your goals. For example: retirement goals, educational funding goals, debt payoff goals, charitable goals, etc.

Next, write down a time frame for each goal. For example, a goal to accumulate enough money for a child’s education would have a time frame that equates to when the child enters college. The time frame for retirement funding is the number of years remaining before you expect to retire. Once you have written down your goals and when you want to accomplish them it is time to drag out your calculator or financial planning software and begin to put a cost to your goals. Some may be relatively easy. For example, if you want to pay cash for your next car you need to estimate what it will cost and when you expect to buy it and then determine the monthly savings necessary to accumulate your automobile purchase fund.

On the other hand, the cost of some goals, and the savings necessary to accumulate money for them, will be difficult. Take retirement for example: How much money do you need for retirement? What retirement lifestyle do you want to plan for? How many years will you live after retiring? What investments do you have? What are your expectations for future investment returns and inflation?

If you are not mathematically inclined or interested, remember that you can always get help in estimating the cost and crunching the numbers to determine how to fund your goals, but only you can define what your goals are. So, spend most of your time thinking about your actual goals. Finally, once goals are defined, priced and the funding necessary to accomplish them is determined, it will be time to reassess them. If you have to save and invest 150% of your current salary for the next 20 years to accomplish your expressed goals, perhaps they need a little fine tuning. Now is the time to get practical and prioritize your goals. Perhaps you need to wait a bit longer for the new car and push off the retirement age from 60 to 65, or even 70. Perhaps a good goal must be sacrificed in order for you to aim for an even better goal.

Also, remember that many wonderful goals don’t require a lot of money. Instead, they may just require your time and effort, such as enjoying family activities, exercising, or learning a foreign language. Henry David Thoreau expressed it well when he said, "That man is richest whose pleasures are the cheapest."