There is a whole new year ahead of you and 2019 is a great time to start looking at your finances and planning for your future. When you are setting new savings goals, it is essential to be realistic so here is how to make the most achievable savings goals and how to stick to them.
Know your Situation
When it comes to your finances, being realistic is so important and a big part of this is being aware of your current situation. Look at what big expenses, like a new car or a wedding, are coming up and when you think they might happen. You will need a clear picture of what your current spending looks like which means getting all of your finances together – receipts, bills, bank statements, insurance policies and credit card balances. You want to get as close as you can to how much you spend and what you spend it on each month. Find out how much you spend a month on essentials like household bills, your mortgage, electricity and gas and how much you could potentially save whilst still paying these.
Break it down
Your savings goal might be a considerable sum – like saving £16,000 for a house deposit – but if you break it down into more manageable chunks, it should be far easier to achieve these goals and move forward. Splitting the same £16,000 into £4,000 a year for four years makes it seem far more achievable. It will also give you a sense of accomplishment more often. You can make your goals more specific too, so it seems like you have actually saved towards a set target, such as ‘Save £1000 for legal fees’ or ‘Save £500 for flights’.
Set a Time Frame
You need to set a timeframe for your goals so you can see how you are progressing and know when you plan to achieve them by. It will also allow you to prioritise savings. If you aren’t going to meet the deadline, you might be able to make some changes and keep track. Being realistic about how long it will take you to complete your goals means having an accurate picture of how things are currently going that you can easily achieve.
It is also worth making sure you are clued up on how much things cost and what your savings goal might entail. If you plan to own a rental property and earn money through buy to let property investment, you can even increase what your savings are worth. Property investment specialists like RW Invest provide a wide range of resources and extra information about investing your savings in property, where your money can gain in value and add an additional income too.
Check Your Progress
Keeping track of your savings goals is another important part of the process. You need to be honest and realistic, even if you overspend. You can use budgeting apps or online banking to regularly see how you are getting on towards your goals too. This allows you to be aware and catch yourself if you slip up. You may need to adjust your savings goals over time so they remain realistic, for example if you get a new job, then you can save more, and it is worth updating your goals.
Have a Purpose
It is essential to know what your purpose is, to motivate you when things are tough, and you really want to buy that new pair of shoes. Having a purpose that you are dedicated to will allow you to stick to your savings goals and achieve them in the right time.
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