May 21 2008
The Importance of Setting Goals
What are you saving money for? Experts believe that having a specific goal in
mind can make it easier to stop yourself the next time the temptation to overspend strikes. Setting specific saving goals will also give you something to look forward to so you won’t feel deprived for not being able to shop or to indulge on that $4 cup of coffee.
Including both short and long-term goals in your list will help you see the progress. Short-term goals are things that shouldn’t take more than six months to accomplish (paying for a vacation), while long-term goals can take up to several years (buying a home, saving for college). “Anticipating short and long-term needs can help you work them into the family budget,” says Family Savings Expert Kim Danger.
Once you have a long-term goal, it helps to break it down into smaller steps. “Instead of stating sending your kids to college as a goal, you need to clarify what that really means and the steps you’ll need to take to make it happen,” says Danger. Examples of how to make that work would be to estimate how much money you need and then break that amount into monthly payments. Or you can start by researching 529 saving plans to see which one works better for your particular situation.
“The key to organizing financial records is finding a system that works for you,” says Danger. “What works for one person may be too complicated for someone else.”
One Response to “The Importance of Setting Goals”
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I can personally vouch for this strategy! I’ve been setting series of goals for the past couple of years, and it was one of the top two reasons I got out of debt when I did. It certainly makes saving money less daunting when you set goals. For me, short-term ones definitely work better. I’m impatient!