Saving automatically on payday could give you the savings boost you need.
With 2018 now upon us, you may be thinking about New Year resolutions.
Many of us focus on increasing prosperity and dream of saving a large pot of cash for a rainy day, life milestone such as a wedding or taking the plunge to purchase a property. But how many of us actually stick to the resolutions we make? Answer: not a lot – 80% of us will fail by the end of February.
If you are seriously considering steps to improve your financial wellbeing in 2018 but worried about falling at the first hurdle, we’ve compiled a list of five top tips to help you become a ‘sticker’ rather than ‘quitter’.
1. Be specific with your goals
Unrealistic goals are often the first of many barriers we face. Goals need to be specific as we naturally work better with a clear, targeted finish line in mind.
Example: “I want to save more money this year” is too broad, whereas “I will save £1,500 by the end of the year” is a realistic and motivational target to work towards.
2. Can your goals be measured?
Being able to follow your progression can be used as a motivation tool to stay on track. Whether you monitor your savings via a smartphone app or simply put in time over the weekend to check statements, watching your money tree grow will give a sense of achievement you would want to recreate time and time again.
Example: Breaking down the overall amount you’d like to save into bitesize monthly chunks will make saving seem less daunting, and thus, spur you on to reach your target. If your overall goal is to save £1,500 in 12 months, focus on the £125 a month instead.
3. Are your goals achievable?
Balance is key for most things in life. You need a challenge to stay motivated, but one that’s not too hard you lose focus and instead, experience a feeling of stress or failure.
If you find that you’re actually saving more than originally anticipated then great! You might even decide to increase your yearly goal. If you do, keep it low (no more than 5%) to avoid undoing all of your good work.
4. Are your goals realistic?
Make sure your financial resolutions can be achieved within a sensible timeframe. We live in a world where many of us want everything immediately; however, this isn’t always possible so we sprint to the finish line rather than taking it steady. This can end in disaster.
Example: You may find working to a timeline of short and long term goals helpful. “I want to have money for a house deposit by September 2019” is much better than “I want a house deposit”.
5. Are your goals exciting?
Give your goal a purpose. Simply saying “I want to save money” isn’t as exhilarating as “I will save so I can move out of my parents’ house next year” or “I will save for a trip to Bermuda”. If planned correctly, this can help you stay motivated and avoid a saving slump.