Do you diligently put some money into a savings account every month? If you do, have you envisioned what you intend to use this money for? You might think it’s not important. After all, you’re regularly saving money and being fiscally responsible. However, like all objectives, your savings could be more efficient if you had a definite plan. Let’s discuss three reasons why you should establish a clear savings goal:
1. INSPIRATION: Without an explicit plan for your savings, what prompts you to save? You may stash your surplus cash with the vague aim to ‘save,’ but a well-articulated and ambitious goal can spur you to save more. If you pinpoint a clear objective like, “I want to buy a used car in cash by year’s end,” it helps you calculate precisely how much you need to save and set aside from each paycheck. This compels you to elevate your savings pace.
2. CONCENTRATION: While devout in saving every month, you might get drawn by various spending temptations. For instance, that shiny new gadget or that pair of trendy shoes might divert you from upgrading your car. However, when you have a clear goal, it becomes easier to resist these fleeting attractions and focus on what’s truly important. Besides, having a clear goal also pushes you to critically evaluate your desires. If you intend to buy a different car, for instance, you’ll be more mindful about its features and cost. Thus, you won’t be easily swayed by seemingly enticing offers.
3. TRIUMPH: Few feelings compare to the exhilaration of achieving a goal that required concerted effort. Imagine you’re saving for a new house. The joy of moving into your own home is wonderfully magnified by the effort you put into amassing the down payment. It’s also beneficial to set and celebrate interim goals within your larger savings plans. Regularly reviewing and celebrating small wins not only boosts morale but also better ensures you stay on track for your final goal.
With the new year approaching—a time for fresh aspirations—it’s an ideal occasion to reassess your savings goals. What are you saving for? Do you have intermediate savings targets? Are you documenting your financial goals?
