As a businessperson, you probably have at least several career-oriented goals going on at the same time. They may be big, small, short-term, medium-term, long-term, you name it. When it comes to personal savings, however, it’s often best to start with small goals. Once you have the hang of them, you can make your goals bigger if you want. (You absolutely don’t have to; why fix something that isn’t broken?) Here’s a look at the strategy behind keeping savings goals small and frequently measurable.
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You Are More Likely to Succeed
Success breeds more success. On the other hand, failure can cause you to abandon a plan or idea for a long time, if not forever. Small goals increase the odds of success. Frequently measuring them also helps you stay on track and gives you more chances to succeed. The effectiveness of your endeavor does not hinge on one big day a year but instead on one day a month, or perhaps even one day a week. That way, if you don’t meet a goal on occasion, you can always say, “I’ll meet it next week [or next month].”
Details Do Matter
When it comes to personal savings, one action can make a huge difference. So, a seemingly small goal such as, “I will evaluate my car insurance on the 15th of the next month,” can reap significant rewards. Through an insurance comparison tool such as www.carinsurancecheap.net, you might discover that you’ve been seriously overpaying on your insurance for years. Your car may have gotten older, your driving record could have improved along with your credit record, and you might drive your car less. All add up to good savings every month.
This seemingly small, even “boring” goal can do a lot. Apply it to other types of insurance: home or renter’s, life, health, you name it, and you could end up saving several hundred dollars a month.
You Have Room for Other Things
One reason why huge goals or projects fail is that they leave room for little else in your life. If you set a huge savings goal that requires a long time to measure (for example, “I will save $20,000 in one year”), it may overshadow other aspects of your life. You may find yourself not going out with friends, eating food you do not enjoy because it is cheaper, and forgoing pleasures because of that big amount you are working with.
Alternatively, if your goal was something such as, “I will get all of my print, audio, and ebooks from the library this month instead of purchasing them,” you still have room for many other things in your life. And you’re more likely to stick with the library the majority of the time in the months that come. You may not save, say, $20,000 in a year, but you will have saved some serious money and still be succeeding.
You Stay Flexible
Small and frequently measurable savings goals also enable you to stay flexible. For example, getting downsized from full-time to part-time may make a goal such as saving $20,000 in one year simply not possible. On the other hand, if your goals are monthly and not contingent on exact amounts, you have the ability to keep going as you always did.
Speaking of flexibility (and failure), measuring your savings goals in exact amounts may set you up for disappointment. Some examples of savings goals are:
- Evaluating car, home, health, and life insurance
- Packing lunch three times a week instead of eating out
- Getting haircuts every two months instead of every month
- Carpooling once a week
- Riding your bike to work three days a week instead of driving
- Setting up a retirement plan
In none of them is a dollar amount mentioned. In fact, it’s even feasible that costs could go up. For example, if you have minimum amounts of insurance coverage, evaluating your needs could result in you realizing that you want more protection. However, you may be more likely to succeed with these goals because they constitute realistic actions rather than an end result.
Many people are not in a position where they can save a lot of money right away. Of course, a lucky few people can sell something such as a second car and get thousands of dollars. Successful, long-term savings is often founded on starting small and actionable.
Image courtesy of jk1991 at digitalphotos.net
