There are many sites that offer advice on how to meet your financial goals, from getting out of debt to saving up for a home to putting money away for retirement. However, they often fail to address what can be the biggest obstacle to making financially responsible decisions, and that is motivation. If you aren’t careful, trying to do the right thing with your money can start to seem like a punishment. Sure, all your friends with their expensive vacations and frequent restaurant meals might be running up their credit card bills, but they certainly look like they’re having a good time doing it. When you feel tempted by short-time fun, how do you stay focused on your financial goals?
One way to meet your goals is to make saving money as frictionless as possible. For example, you should try to have the maximum deducted from your paycheck for retirement savings, particularly since this may be matched by your employer. You can also have your bank automatically put part of your pay in a savings account. There may be easy ways to save money on your bills as well. You should shop around for better deals on car and auto insurance and on your cell phone contract whenever it is time to renew. A private student loan consolidation could reduce your interest rates and save you money. A Direct Consolidation Loan can help you with your federal loans.
It can be hard to stick to a savings goal if you aren’t saving toward anything concrete. Be sure that you are clear about what you are putting your money toward. You probably have a few objectives that vary from short to medium to long-term in nature. For example, you might be saving for a vacation, your child’s college education and early retirement. It might help you stay focused on them if you write them down.
It’s okay to set challenging financial goals, but you do have to be realistic. You will become discouraged if you try for something that is simply too difficult. For example, a budget that requires you to never have a single meal out, a drink with a friend, or a new shirt is likely to be impossible to stick to. You need to build some flexibility into your lifestyle. Maybe you will give up your usual practice of seeing a full-price movie two or three times a week, but you might replace it by going once a week on the discount day.
Reaching your goals are rewards in and of themselves, but you will be more motivated if you build in additional ones along the way. Of course, they should not be rewards that take a lot of money. It might be okay to splurge now and then, but even better would be thinking of ways to reward yourself that don’t involve spending any money: a day’s hiking, bingeing your favorite TV show or a long phone call with a faraway friend. By reminding yourself of how you can have a good time without spending a cent, you might improve your savings habits even more.