short term goals Archives - SavingAdvice.com Blog

With the New Year fast approaching, many begin to think of what they would like to accomplish during that time. That motivation is usually quite high in the first few weeks and months, but many encounter difficulties or have trouble staying focused and motivated for the entire time period. Keeping yourself on track can be difficult, but there are a number of different ways to keep yourself motivated as you’re trying to save money:

Write a List

Writing a list can be a great way to keep yourself focused throughout the year. This list can account for any number of things, from how much you want to save each week to what accounts you want to deposit your savings into. Even keeping a list of monthly expenditures and finances can help keep you on track. If you’re someone who works better when you have a list to focus on, this should be your first step.

Set Long-Term Goals

One of the best ways to keep yourself motivated is to set long-term savings goals. Having a specific goal at the end of the year will make you more eager to put money away. Whether your long-term goal is to save over a year or two years or even five years, having something specific in mind to save for is a great motivator.

Set Short-Term Goals

Additionally, having a list of short-term goals is a great motivator as well. Many times it seems easier to aim for fulfilling short term-goals because they’re more feasible than the ultimate long-term goal. Creating a number of “baby step” goals that can be achieved over a shorter period can be another great way to keep yourself focused and motivated to save money.

Keep a Financial Journal

It really helps to write things down to maintain long-term motivation. Just as making lists helps with this, so does keeping a financial journal. Having one will help you keep track of what you earn, what you spend, and how much you save each month. Sometimes writing down how much money you spend or save per week can do a lot to make you realize your spending habits and adjust them accordingly.

Allow for Bad Days

No matter what you’re trying to accomplish, you always need to allow yourself room for bad days. There are going to be days or weeks where you can’t save money, and that’s okay. Don’t let the frustration from a few setbacks derail you from your overall goals. You don’t have to be putting aside money every day or even every week. Sometimes you may need to put money towards an emergency instead. Even if you plan on making yourself follow a strict schedule, you have to make sure to allow yourself some breathing room. If you can’t save one month, maybe put aside a little extra the next time you can save. When you are able to let the inevitable setbacks happen without them making you feel like you have failed, you’re much more likely to stay motivated.

Reward Yourself

It may seem counter-intuitive, but you also need to reward yourself. Sometimes people can go overboard with savings money, thinking only about the future and completely disregarding the present. Everyone needs to reward themselves or splurge on an item they want or need every once in awhile. Plus, rewarding yourself along the way is a great way to keep yourself motivated.

Focus On One (Or More) Motivational Factors

Focusing on a motivational factor can also be a great way to stick to a financial plan. You may want to pay down debt or find a new form of income. Or you may want to buy something nice for yourself after you’ve saved a certain amount of money. Focusing on these factors will help you keep your eye on the prize.

Read Financial Literature

Reading financial literature can also be a great way to keep yourself financially motivated. Plenty of articles, journals, and magazines focus on different savings or investing tips, and they may give you a few new ideas on how to better save your money. Plus, it’s a good idea to keep up with current news and events. You never know what new article or piece of information will help you out.

Find Yourself a Support group

One of the best ways to stay motivated is to have a group of people who will support you and your financial goals. it’s great if you can find one in your local community, but it’s not essential with the Internet. Start hanging out in a personal finance forum, ask questions, help others and become a part of the community. They will help cheer you on with your successes and be there to pick you back up and steer you in the right direction when things don’t go as planned. These groups can be a great motivational base to have as you travel your journey.

Give Yourself Weekly Challenges

If you’re someone who enjoys challenging yourself, why not challenge yourself when it comes to saving money? This can be something as simple as a weekly savings challenge or to go a day or two without spending any money. There are plenty of different, creative ways to challenge yourself when it comes to saving money. Set weekly or monthly goals to keep yourself interested and motivated in your financial plans for the year.

Try Money Related Apps

There are also a great many computer or phone apps that are geared towards helping you make and save money. Having an app that tracks your spending and savings habits can be a good way to keep yourself on top of your game, plus those that can help you make money may thicken your wallet.

(Photo courtesy of Steven Depolo)

I get tickled when people tell me that they read a certain book or listened to a certain guru and followed the plan to the letter, but still have financial trouble or they can’t meet their goals. They seem stymied as to why the plan didn’t work. I often ask them if the plan was tailored to their specific situation, beliefs, needs, and goals. They always say, “Well, no, it was just the plan in the book. But it must be good because the author (or guru) claims to have helped a million people.”

What they don’t yet understand is that it’s called “personal finance” for a reason. Personal finance is personal. Yes, there are some generalizations that apply to most people such as putting away a set amount each payday into an account for emergencies. This is good advice for almost anyone, unless your crystal ball tells you that you will never have an emergency. But a lot of personal finance advice is relevant only to the extent that it applies to your unique situation. The advice to cut out lattes only works if you’re already drinking them. If you’re not drinking lattes, you’ll have to find some other way to save money.

When you set out to improve and manage your finances you have to remember that they are your finances and no one else’s. You can learn from the advice of others, but when it comes time to do the work you have to take into account your unique circumstances in order to succeed. So what personal items do you have to account for?

Your income: Some plans assume a certain level of income. If you fall below or above that mark you may have to adjust the plan to compensate.

Your ability to generate more income: Some plans suggest you get a part time job to bring in more income. This may not be possible if you spend your nights caring for an aging parent or disabled spouse. In such a case you’ll have to find a way to generate income from home, or find other ways to reduce spending.

Your religious beliefs: If you believe in tithing and aren’t willing to give it up, you’ll have to find a way to work it into the plan.

Your social beliefs: If you believe strongly that your money shouldn’t go to certain companies or causes, you may need to adjust your investment and spending strategies. Similarly, if you are adamant about donating to specific causes, you will have to reduce spending in other areas in order to make that possible.

What you like to do and what you want to own: Maybe you want to blow all your money on travel or video games. Maybe you want to eat out every night or own a Ferrari. That’s fine. It’s your money and what you want to do with it is up to you. As long as you aren’t relying on others to carry you and you aren’t shirking your other financial obligations, it’s up to you how you spend your money. Plans that tell you to give up eating out or some other thing that you love will just make you mad. You have to modify the plan to support your personal desires.

Your long term goals: Do you want to have a big retirement fund so you can buy a $300,000 motor home and see the country? Pay for all your kids’ college educations? Go back to school yourself? Amass enough wealth so you can give to all your favorite causes? Leave a huge inheritance? What you want your money to do long term will determine how you allocate it. Everyone’s goals are different and a plan that preaches nothing but retirement funding when you want to pay for your motor home won’t help you.

Your short term goals: Do you want to get out of debt? Buy a new car? Save for a down payment on a house? Renovate your existing home? Get ready for a child? Everyone wants to do different things, and in different orders and ways. How you want to meet your short term goals will determine how you work your financial plan.

Your priorities: Maybe you want to both renovate your house and buy a new car. You will likely have to decide which should come first and then work toward the higher priority first. Most generic financial plans don’t take into account your personal priorities.

Your level of commitment and your weaknesses: If you are fired up to deal with your finances, great. If you’re a bit reluctant, you’ll need a plan that either inspires you or makes allowances for your reluctance. If you have areas where you are weak, you’d better strengthen them or create a plan that works in spite of your weaknesses.

Your changing life: Whatever plan you create today will probably not work in five years. And that new plan will probably be useless five years after that. Your circumstances, health, income, family size, and desires are always changing. What was important today may not be important tomorrow. And there will be things beyond your control, such as inflation, recessions, job losses, and even boom times that will impact your financial plans. A generic plan cannot possibly account for all of the changes you will go through.

That’s not to say that all financial plans are useless. The financial plans you find in books or on TV segments can be helpful. You can take pieces from several plans and cobble them together to make something that works for you. And you can learn a lot by looking a different plans and seeing how the author’s approach finance. Extra information is rarely a bad thing. But when it comes to following something word for word, you’re likely to run into trouble when your unique, real life gets in the way.

Of course, creating a plan that works for you takes a lot of effort, and that’s why people turn to books and ready-made plans first. As with weight loss, it would be so much easier if you could just pick up a plan, follow it to a tee and then the miracle happens and your finances are fixed. It’s much harder to inventory your life, to be honest with yourself, to admit where you’ve gone wrong, and to account for all of the things you want, hope for, and need. And then adjust that plan constantly to keep up with the changes in your life. But creating your own plan is the only way to win. You have to make a plan that is personal for you.

And while you’re working your plan, you have to learn how to tune out all the people who are telling you that you’re doing it wrong. They may not agree with or understand your choices. They will tell you that donating all of your extra money to an animal shelter is a waste and that you should be saving for a home. But that is their priority, not yours. They are working their own plan (or they have no plan and are simply parroting something they heard elsewhere). As long as you have a plan that works for you and are sticking to it, you’re doing it right. You’re keeping your finances personal.