Most of us set goals of one kind or another, but often times we forget to include our finances when it comes to what we hope to achieve. If you’ve never created or maintained an annual savings goal, you need to start now. Here are four good reasons why . . .
1. It Gives You A Target
When you have a savings goal, you have something concrete to work toward. Imagine how difficult it would be to hit the bullseye on a target you can’t see. That’s why it’s important to have a specific savings objective: With it, you can measure your progress and decide if you’re saving enough.
2. It Helps You Develop Better Spending Habits
When you’re forced to save a set amount each year, it requires some care in how you’re spending your money. You’ll think twice about incidental or unplanned purchases as they’ll make it that much harder to make your savings target. Over time, this awareness will turn into habit, and your ability to save will be beneficial.
You don't fall into good habits; you fall into bad ones. Forming positive habits requires intentionality.
3. It Results In A Real Savings
One of the great things about having—and keeping—a savings target is that your reward is tangible. If you maintain your goal, you’ll have the amount of money you planned to save waiting for you in your bank account. So not only will you have the self-satisfaction of developing fiscal discipline and patience, but you’ll come away with some money in your bank account. That’s a pretty good deal.
4. It Helps You Plan For The Future
When you know that you’ll have X amount of money saved by a given date, you can then make plans for the use of that money. Having a savings goal makes it possible to make long term plans because not only are you outlining future projects, ambitions, and life changes, but you’re also ensuring that you’ll have the resources to make them possible. After all, a plan that can’t be enacted is no plan at all.
Setting an annual savings goal not only results in money in the bank, but it helps you develop a better attitude toward money and spending in general.