5 Practical Tips for Setting Savings Goals

We are entering into the first week of our Jumpstart January challenge. I already introduced our pantry challenge. I have a $100 bill in an envelope to spend for our family's groceries for the month. Think we can eat out of our pantry and freezer and feed our family of four on this admittedly very limited budget? As part of our Jumpstart January challenge, we will also be looking at setting savings goals. Deciding to save money is often easier said than done, and my hope is that you can set savings goals that will set you up for long-term success. I've got 5 practical tips for setting savings goals. Check it out!

5 Practical Tips for Setting Savings Goals

If you don't have a clear goal with the ability for success along the way, failure is inevitable. I've got 5 practical tips so that you can set realistic savings goals that you will be able to achieve!

1. Identify Your Goal

Just saying "I want to save money" isn't a goal. You have to identify a goal that you can achieve and work towards or you will never have success. 

Common things people save money for:

• a down payment on a home
• college tuition
• to get out of debt
• save for vacation
• savings for retirement
• create an emergency fund

Why you need an emergency fund

2. Be Realistic in Setting Savings Goals

You will need to take a look at your finances to see if your financial goals are attainable. If you want to save $50,000 this year, but you make $30,000 this isn't a goal you will be able to achieve. 

Top 10 reasons people overspend

3. Break it Down

I recently heard someone say that they needed to save $20,000 in 2021. Whoa.

That sounds like a lot of money when you talk about it in a lump sum, but let's break it down. There are 52 weeks in a year, so that is about $385/week that needs to be saved. This goes back to number 2. Look at your finances and see if this is a realistic savings goal. It's ok for it to be a hard goal {hard doesn't make it bad!}, but is it possible to pinch your pennies enough to make that a realistic goal? 

4. Know Where Your Money is Going 

I often get asked by people to help them start a budget, but I can't help you start a budget until you know where your money is going. You have created expenses for yourself and you have obligations to pay on those expenses. You've also created habits {we are tackling our first one with the pantry challenge this month!}, that require money to maintain. 

Sometimes looking back at past bank statements for the month and adding up how much you spend on Starbucks or at the craft store can be eye-opening and will create the first step towards change, but you can't do that until you know where your money is going. 

There are things you have to spend money on like housing, food and transportation, and other non-essentials that you are spending money on. Once you identify these, you can start to make some headway on setting a realistic amount of money you can set aside to help you achieve your goals.

5. Assign a Price

Know the exact dollar amount that you are saving for. Do you want to pay cash for a car? Know how much the car you want costs. Want to take a family vacation? Put a dollar amount on it so you can save towards that goal. 

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Spend some time looking at these 5 practical tips and setting the savings goal you want to work towards this year. I'd love to hear what your goals are. DM me and let me know what your savings goals are for 2021.

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