Your big financial goals in life may well seem insurmountable at times. Whether that’s being debt free, saving up for a major investment, or simply getting yourself to a point of financial security, life has a way of throwing up unexpected costs and challenges that make any goal you set all the more difficult.
The key to hitting financial goals is not so much about the end, as it is the means to the end. By setting yourself up with simple, daily, obtainable habits, the larger long term results are in turn far easier to achieve.
With that in mind, here are some tips for targeting a financial goal:
Clearly articulate the goal from the outset
Simply saying to yourself “I want to save money,” isn’t going to cut it in the long term, as goals need to be specific and measurable in order for them to have any meaning and actually be achievable. What are you saving for? How much do you need to save? That goal should have a timeline for achievement, too, as people tend to respond better to the pressure of a deadline than when they’re targeting something that is open ended in their mind.
Set yourself up with a routine that limits spending waste
For a lot of people, one of the biggest places where they drain money is on buying lunch each day from a food court near work. If you were to get up 20 minutes earlier, make yourself lunch before you head off to work for the day, and then put the money you save from that away, you would see savings accumulate immediately, and quicker than you might realise. If you take a look at your spending habits, there are almost certainly many areas such as the lunchtime shop that you can find efficient alternatives to, without sacrificing your quality of life.
Set subgoals
The primary end goal could well seem unobtainable at first, especially if it’s an ambitious one. You will find a great deal more success with your savings plan if you break the end goal into smaller ‘subgoals’. If these are achievable every one or two weeks, then you’re going to feel like you’re making progress, regardless of how distant that final end goal may be.
Ideally, these subgoals should be achievable only if you follow through with the routine you set up in the previous step. So in other words, the two-week sub goal will only be achieved if you make yourself lunch nine days out of ten. You’ll find that when you’re working against strict deadlines to achieve goals (but leave just a little room to be lax once or twice), then you’re going to be much more committed to following through with the plan.
Keep records
Once you’ve set yourself up with some of these money-saving routines, keep a logbook (or download an app to your phone or tablet) to keep track of the money that you’ve saved from the process, and how it’s tracking towards your goals. It’s both satisfying and motivating to watch as the numbers start to grow, and that motivation will help keep you committed to the plan.
Get someone else involved
Whether it’s a friend, your spouse, or your accountant, savings plans work best when there’s someone there to help you stay on track. An ally in your plan will help you negotiate low moments or moments of weakness, and if they’re on a savings plan of their own, you can both celebrate reaching milestones together, providing a bit of friendly, competitive motivation in the process.
Give yourself an allowance
No good will come of financial self-punishment. Deny yourself to an extreme enough level, and you’ll make rapid progress for the first sub-goal, and perhaps even the second. But eventually you’ll give in, and once you do that it’ll be difficult to go back.
Set aside some money that can be used for personal purchases. Make sure it’s not too much, in order to continue encouraging restraint, but enough that you still feel like you’re getting something “fun” out of your money. Alternatively, work a reward into reaching each sub-goal as part of the savings process. It’ll be even more encouragement to hit those goals when there’s a good night out waiting as a prize.
