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“Financial goals take time and efforts. The right strategy can make it a lot easier.”
Have you ever saved money? How much money you set aside every month? Have you saved money for a particular reason? For many people financial stability is all about saving money and they are satisfied as long as they are putting away money for a rainy day, but they face cash shortfalls when an emergency rears its ugly head.
“You should have three months worth of living cost in your savings account,” you can find it everywhere on the internet. Before following it blindly, just ask yourself is that enough to be financially stable? Whether you transfer 10% or 20% of your gross salary to your emergency cushion, it is not going to help you any way unless you know why you are stashing away. Here are some common reasons why you fall off the financial track and what you can do.
No particular reasons for saving money
Do you know why you want to save money? Perhaps you would have been setting aside money for several months, but reaching your financial goal seems to be harder and harder. Why? Because you do not have a specific target or direction. You eat to have energy, you sleep to get over exhaustion, and you work to earn money. Likewise, you should save for a particular reason.
Solution: To nail down your goals you will have to be smarter. Suppose you are saving money to get rid of credit card bills. Since the whole of the debt cannot be paid back just in one go when your account is already in the red, you should set a more specific target. For instance, “I want to pay off £1500 in a period of six months.” You should have a money goal worksheet. Have a look.
Financial Goal ………………………………
Total Money …………………………………
Money Saved ……………………………………
How to Achieve Goal ……………………….
Completion Date ……………………………..
Not monitoring the achievement of the goal
Most people do not write down their financial goals and do not push themselves to examine how closer they are to their goals. To be honest, you will never achieve plain goals as they do not keep you motivated. Studies have shown that if you jot down your financial goals and look at them daily, you will feel more encouraged to make efforts to achieve them. In fact, it will force you to look over how much you have saved and how long you will take to achieve your goal.
Solution: You should set down short term as well as long-term goals. Give ranking to each goal on basis of your priority and accordingly decide the limit for monetary contribution of every month. For instance, paying off debts should be given higher priority than buying a new cell phone. However, if you meet any unexpected expenditure in the meantime and you do not have enough money, you should not hesitate to take out payday loans even if you have a settled CCJ. These loans are generally paid back in lump sum. Once you clear these dues, you can start savings again to achieve your goal.
When it comes to achieving a financial goal, people get so overwhelmed that they start rigorously savings. The higher they save, the better it is, but this is a myth. Your financial goals and savings to achieve them should be as realistic as possible. Excess savings can end up not spending in vital things. For instance, if you whittle down all entertainment sources, this may be good in the short run only. Soon you will be exhausted of sticking to this financial plan.
Solution: Before you create a saving plan, you should look over all of your income sources and monthly expenses. Your goal should be avoiding unnecessary expense such as impulsive buys, but not essential expenses. Overstretched saving is a symbol of poor financial decision that will end up with frustration only. It is good if you prefer home cooked meal instead of dining out, but you can prefer restaurant meal occasionally.
The bottom line
An aimless approach will take you nowhere. You should have a systematic way to achieve your realistic financial goal. Consider your both spending and saving habits. The journey from point A to B is not going to be easy and plausible without a clear direction. It may take a bit longer time to achieve your financial goal, so you need to be patient.