Getting the most out of your finances can be a daunting task. You’re probably plagued with monthly expenses and at least 5 things you’d like to save for. If your method is simply telling yourself that you need to save, perhaps you need to start setting financial goals.
Knowing exactly what you are saving towards is the first step to being motivated to put your hard-earned cash away for something you really want. There are two reasons why focusing on what you do with the money is more important than focusing on how much you’ve got in the bank.
Firstly, it’s always a smart idea to have a plan for your money. Sometimes you’ll have a specific plan like saving for retirement, for a deposit on a house, or for a once-in-a-lifetime vacation. Other times, you’re saving and investing money now because you want more options in the future.
Secondly, making your financial goal revolve around a result and not around a number can often help you find ways to achieve that result for less. For example setting the goal of “visiting Thailand” instead of the goal of “saving R20 000 so I can visit Thailand,” might motivate you to find ways of making the trip less expensive — and getting you on those beautiful far away beaches even faster.
An added bonus to feeling great about achieving your financial goals is that you are rewarded with the item or experience that you planned on saving for. This will motivate you even further to set new goals and to keep working at them.
Do you have a foolproof saving method? What goals are you setting for yourself? We’d love to hear about them. Read our blog for more tips on sticking to your savings plan, teaching your children about saving and knowing why you are saving.