Why are you simplifying?
Why are you trying to save money?
For my family, that answer is easy. We have little kids and we want to be able to help them with things down the road, like a car and college. We eventually want to have a home in the country. We want to be able to go on more family vacations. We can’t do any of these things while we are struggling to pay off debt. Right now, our savings goal is can be summed up in a few simple words: get out of debt.
What is a savings goal? To me, it has a double meaning.
First of all, what are you saving for?
You might have more than one initial answer to this, and that’s okay. You could be saving for a car, a house, a vacation. Your goals could be smaller-you might be saving for a new TV or even for a particular book or movie. No matter how small or large your goal may be, it’s important to have at least one-and sometimes several.
Secondly, what is another meaning for the word “saving”? To rescue!
When we are trying to save money, some days are harder than others. Sometimes it’s easy to say no, to stick to the budget and resist the temptation. Other times it’s a bit more difficult. Another meaning for the term “savings goal” is, what is saving you from going crazy? What is saving you from giving in? This goal!
So how do you go about setting a saving goal?
To set a goal, any goal, you need to keep a few things in mind.
1. Pick your dream goal and break it down
What is it that you are ultimately working for? For us, we want to have what you would call “financial freedom”. We would like to be debt free, able to save some, and able to live a modest life with a little extra money. We have no goals of expensive cars, giant homes, or fancy jewelry. So pick your extreme, out there goal and note that down.
Once you have your goal, take it and divide it up into small pieces that you can work on individually. For example, for us, our first goal is to get out of debt. You might have to divide it up several times, into even smaller, more manageable pieces. Make sure you make your initial goal small enough that you can see the light at the end of the tunnel! Once you have achieved your initial goal, you can then choose what small goal you want to tackle next, as you slowly chip away at your dream goal.
2. Keep your goals in front of you
If you are to achieve a goal, you must keep it in mind constantly. Write down-everywhere! Note milestones on your calendar, put post its on your computer, set reminders on your phone. If you can, take or create a picture of your goal and keep it somewhere highly visible.
Working with a very tight budget as you try to pay off debt? Create an alternate, dream budget that shows what your life would be like without debt. Comparing the two side by side will help to motivate you.
3. Work hard, play hard
Don’t let yourself burn out on your savings goal! Make sure you leave some money and energy for recreation. Create a category in your budget for fun, and you’ll find that you will be far more inclined to stick to your guns when it comes time to scale back in other areas. Splurging on the occasional treat will really perk you up, and you will learn to regard things such as dinners out and trips to the movies as an exciting perk in your trip toward your goal.