The best way to ensure that you stick to your savings goals is to pick something that matters to you most. That in itself should be inspiration enough to keep you on the right track. But if you are struggling to work out what that might be, here are a few tips to make sure your goal is an attainable achievement, as well as being motivational.
S is for …the need for a Specific goal – so figure out exactly what you want and how much it costs
For most goals, this is pretty straightforward. For example, if you want to buy the latest phone; find out how much it costs, or if you want to buy a house; determine how much of a deposit you’ll need. For longer term goals such as figuring out how much money you’ll need to live comfortably for 20 or 30 years after you stop working, it’s much harder to come up with a specific figure to aim for. It might make sense to concentrate on a specific amount that you will put aside each month.
Top tip – make sure you do your research properly! There is no point underestimating how much it will cost, this will only get you down later on.
M is for…being able to Measure your success and development along the way. This will help you stay on track and know how much closer you are to your ultimate goal. Set periodic targets to determine your progress, for example “in 6 months I will have saved a minimum of £300”
Top tip – Keep motivated by revisiting your list frequently to check your progress and don’t forget to reward yourself when you meet certain targets along the way!
A is for…Action Orientated. You will need to develop a strategy for how you are going to achieve your goal, not just hope you will find the money somehow. This is where your budget comes into action. You will need to rework your current budget to include the money you will save each month to meet your goals. Then put your plan into action, and watch your goals become reality! For further advice on budgeting, see How to Create a Budget.
Top tip – To find the money, you might need to cut back on something else. It might be helpful to list the reasons for achieving your goal, to always remind yourself of the purpose and benefits of accomplishing it. Or put a photo or picture in your purse of what you are trying to achieve to remind yourself every time you are tempted to stray from your new budget!
R is for…Realistic and Relevant – The objective should be challenging, but realistic at the same time, otherwise you will get discouraged when you don’t reach your goals. Start to determine how the goals can be realistically achieved – how much money can you really save each month, without feeling that you are struggling or seriously losing out on anything else? Also, it is important to make sure the goals are relevant to your life. Ask yourself, does this seem worthwhile? Is this the right time?
Ask yourself, does this seem worthwhile? Is this the right time?
Top tip – It will be more of a struggle to save money for no reason. Make sure it really is for something you want and will make a difference to your happiness or peace of mind.
T is for…Time-bound – When do you hope or need to meet your goal? Set a target date for each goal on your list, and use this as a deadline to meet, or beat. Your commitment to this deadline will help you focus your efforts on completion of the goal. Saying, “I want to save £1,500 to go to Vietnam in August of 2014” is a much more attainable goal than saying, “I want to save for a family holiday.”
Top tip – Be aware that setbacks will happen. If something throws you off of your target date, don’t give up – set a new date.