Getting Specific with Savings Goals for the Year Ahead

We’ve talked before about the idea of setting goals so you can save what you want to save (and ideally more besides). But there is a big difference between setting goals and setting specific goals that are packed with detail. The difference is mainly that detail makes it easier to be held accountable to those goals.

Take a look at these two examples:

#1:  “I want to save as much as possible during the coming year.”

#2:  “I want to save $5,000 within the next 12 months. I will do this by cutting back on spending and finding better deals for utilities and other outgoings. I must save at least $416.66 a month to achieve this goal.”

If you had to pick one of these two examples, which one would you pick to get you up and running and headed towards your goal this year? Most people would automatically go for the second example when presented with both of them. And yet if they were left to their own devices they might end up going along with the first one without even thinking about it.

The trick to remember is to include as much detail as possible in your savings goals. It doesn’t matter why you are saving – there doesn’t even have to be a reason beyond wanting to create a cushion to protect you in case of financial woes. The more information you can add to your goal, the more personal it becomes. This in turn makes it easier to keep your goal close at heart so you stand a much better chance of achieving it.

You’ll also notice the second goal gets a lot more specific in terms of timing. Not only does it specify the amount of money you want to save, it also divides it up. This means you know exactly how much you need to save each month in order to hit the target at the end. If you fall short, you know you need to up the ante over the rest of the year. If you end up saving more than the allocated target amount in January (for example) you should still aim to save the monthly amount from February onwards. The additional sum can act as a cushion in case you fall short for some reason later in the year.

Getting into the specifics of things doesn’t just apply to monetary goals. You can use this technique in all kinds of situations. However it certainly works well if you would like to finish this year with more cash than when you started. It doesn’t matter whether you want to put the money in a standard savings account, stocks and shares or anything in between. Setting a proper goal to begin with is the aim here, and you might be surprised how much you can achieve when you spend time working out the details. Try it now and see just how much easier it can be to save this year.