We all have goals. Drink more water. Read more books. Be nicer to people on the tube. For some, the ultimate goals is a house to rival the Jones’. Others want the freedom of never saying no.
Everybody wants to better themselves – so why not extend these goals to your finances?
Saving is important. We know this. Realistically, we should all be putting money away each month. But it’s not as easy as that, especially with life’s daily temptations and the increasing price of simply living.
So how do we focus on our financial goals and motivate yourself to work towards them – rather than splurging on the regular?
Ask yourself, why?
It’s obvious that you should be saving, but where do you go from there?
It’s more important to ask yourself why you want to save. Is it to protect yourself from getting into debt? Do you want to travel? Are you building a future where your children are financially free? Perhaps you’re saving up for a mortgage.
It’s the ‘why’ that is key to figuring out how you should set your financial goals and keep that motivation going. It’s the ‘why’ that can inform how you achieve your financial goals too.
If you want to become debt free, perhaps the best option is to consolidate your high-interest debts into one, low-interest monthly payment to better manage your debts. If your financial goal is to save for a mortgage, perhaps it’s time to find a high-interest ISA outside of your traditional high-street bank. Use your ‘why’ to inform what you do with your disposable income.
More importantly, hold onto those reasons when you’re faced with temptation.
When a text that innocently asks if you want to go to that festival next weekend pops up, and the answer is absolutely yes, (and you have that spare £200 to spend on your ticket and your tent and warm beer and the memories) think about how it impacts your goals.
It is a lot easier to say no when you have an actual reason. Even if you’re saying no to yourself.
‘I couldn’t possibly go on that pizza tour of Naples next weekend because I’m really trying to save money to go to South East Asia next year.’
When you have a bigger picture / a legitimate reason, politely declining the smaller temptations will become a lot easier for you and the invitee to handle.
Long and Short Term Goals
When we think about financial goals, we often go straight for the biggest, best possible outcome. Saving millions and millions and having property in at least 4 countries does sound like an awfully delicious goal, but it’s going to take a lot more hard work and time than simply paying off your credit cards.
When setting your goals, it’s good to have a variety so you can celebrate the small wins and watch them feed into the bigger ones.
For example, you could have the following goals;
- Prepare own lunch every day, except for Friday
- Invest at least £100 a month
- Put the deposit down for a mortgage in 5 year’s time
You can already see how every small financial habit will automatically help you manage the larger goals. We’re not saying giving up Starbucks will get you that holiday in the Maldives, but it helps. Aiming to invest every month will build your returns and could eventually give you enough to put a deposit down.
Invest with a peer to peer platform like Leap to earn even bigger returns – maybe the Maldives won’t be so far off…
Plus, whenever you achieve a short-term goal you’ll get that warm happy fuzzy feeling inside. Get addicted to that feeling. Use it to push through to your long term goals.
It Feels Good To Feel Good
So often when you feel bad about your finances you’ll go into bury-your-head-in-the-sand mode.
You spent too much on drinks with a friend when you only had £10 left in your account and now you’ve ignored your bank balance for two weeks. Many more drinks happened during that time. It was fun, but you’re left feeling out of control and anxious and you don’t know how much money you’re left with.
77% of the UK claimed that they felt stressed about their financial situation.
Not being in control of your money is one of the biggest causes of financial stress, so simply having a plan could put you on the right track to feeling good again.
Setting financial goals for yourself, especially ones that are short-term and achievable can make you feel like you’re back in control, even if the situation is far from over. Every time you achieve a short-term goal, you’ll feel inspired to keep going. So keep going.
How To Stick To Your Financial Goals: Key Takeaways
- Figure out why you want to create a goal to find your motivation, figure out what the steps to get there and resist temptation.
- Make sure you create a variety of short term and long term goals so they can feed into each other. You can also use the gratification of achieving short term goals to push yourself.
- Even if you’re in a complicated financial situation, having a plan can make you feel like you’re in control again.
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