By: Vincent Mortensen
It’s the beginning of a new year and we all know what that means: time for new year resolutions! Some of our favorites include lose weight and yes, save money.
Many of us don’t develop the goal of “save money.” Do you have to save $1 or $1,000 to be satisfied with your goal? Do you want it to last the entire year or just some of the year? Is your saving money goal actually possible? There is a concept that works well if you want to set your financial goal: SMART goals. A SMART goal is a clever acronym that contains all parts of creating a successful goal.
Specific – Your goal must be specific. Saying “I want to save money” is not good enough. Exactly how much do you want to save and for what purpose?
Measurable – Be sure to have opportunities to see how you are coming along with your goal. Example: Save $100 each month. That way, you can be sure you’re still on track for success.
Attainable – Do you feel you will be able to put the needed amount of time and effort into building your financial goal?
Realistic – If you want to be a millionaire by the end of the year, you’ll have to rob a bank or win the lottery, and both are illegal in our state. A great rule is saving about 10% of each paycheck. This should be a good tool to give you a reality check on how much you can truly save.
Time-oriented – So you’ve put a dollar amount on your financial goal, but it’s still not enough. Create a specific time you would like your goal achieved by. Many times, if we don’t give ourselves boundaries, we won’t follow through with what we’re trying to accomplish.
Not-so-good goal: I want to save $500.
Better goal: I want to save $500 for an apartment deposit within six months by putting away $84 a month.
Saving money isn’t a tough task if we put our mind to it. Just like any skill in life, we will be lousy at first but will become better with time. Take some time to create your successful financial goal today.