Everyone would like to save more money – that much is obvious. But sometimes, we aren’t even sure what we are saving for. When we don’t have concrete goals, it makes saving money feel pointless and tedious. If you are serious about improving your financial life, you need to set solid financial goals.
After I graduated from college, I took a job as an accountant at a local accounting firm just minutes away from my house. I was living at home at the time, so I was saving a fair amount of money. It was great, watching the number in my account grow month after month. But eventually, the excitement wore off. I didn’t have any concrete goals for what to do with that money, so it began to feel pointless. It was just a number. Once saving money started to feel less important, I started to value it less and spend more on things I didn’t need.
Eventually, I decided it was time to move out. I started a job in the city and my commute from home was over an hour long, so I wanted to get an apartment in the city to cut down on my commute and live in a more exciting area. Suddenly, I had a goal, and saving money felt important again. I needed enough money saved as a financial cushion in case of emergencies, such as a layoff, now that I had rent to pay. That’s when I started to realize I was spending more than I needed on things I didn’t need. It made me think critically about my spending decisions and decide what was the most important way to use my money. When I would go to the bar, I didn’t always need to try a new, expensive craft beer – a cheaper, household name draft would hit the spot just fine. Making a habit out of saving a few bucks here and there can make a huge difference in the long term.
Having the concrete goal of saving to move out made my savings habit feel more real, and suddenly I was able to take it much more seriously. Without a goal, it’s difficult to take action. My next goal is to save for my own multi-unit rental property so I can live in one unit and rent the other, with the hope of reducing my living expense. This is a large endeavor, so you can bet it’s forcing me to pay close attention to my budget and savings.Having a financial goal gives you something to work towards, and people work more effectively when they have concrete goals. It becomes a concrete objective, and makes it fun – almost like a game. So make a point to write down your financial goals today – for the next month, year, decade – whatever makes the most sense for your situation. Then notice how your motivation to save grows as you crush that goal and move on to the next one.
