Everyone wants to save more money. I don’t think I’ve ever met a person who says “I’d love to burn through my savings as quickly as possible,” or “Man, I’m just not spending enough on unnecessary items.” Some people certainly live like that, but in reality, we all have a goal of saving more money.
The question is, why do you want to do that? I’m not questioning the intent or desire – that’s a phenomenal thing. But there’s more to it than just wanting to do something.
Setting a Goal
In my article about Budget Success and Goal Setting, I discussed that you need to have some motivation behind your goals. Otherwise, it’s just a wish.
The fact of the matter is, there are things that we wish we could have but we never take the steps to achieve. We’ll examine why in a little bit, but how do we get to the point of having a true goal towards which to strive in the first place?
First and foremost – what’s is your real goal? Do you want to cut your spending in half? Would you rather develop passive income streams or have $1 million in savings by the age of 50? The first step towards figuring out your plan is setting an end to it.
Take some time to think about it, but I’ll give you mine. My goal is to increase my income from blogging and other side hustles to at least $6000/month.
Let’s be quite clear, though – that’s just the first of my goals. From there, I have many other plans, and because of that, I’ve made that goal pretty strict and very early. I’d like to accomplish that goal by the end of 2021.
What’s Your Motivation?
Now here comes the fun part: Why did you set this goal?
The most important part of creating a goal is defining the driving force behind it (I’ve probably already claimed that 5 things are the most important parts of creating a goal, but just go with it).
The only way you will stick to a goal is by leaning on your driving force. With this, you can push through the hard times and make the correct decisions, even when it seems difficult.
Your motivation can be anything – you may want to just start building your wealth so you can feel comfortable in retirement. Or, you’d like to leave a large inheritance to your children. Maybe you’d like to leverage your finances for a cause you support. Whatever your motivation is, state it explicitly along with your goal.
My motivation is along the lines of the FIRE movement – Financially Independent/Retire Early. However, I’m on the front end of that – I’m not someone who likes to sit still very much, so even if I technically “retired” at 35 or 40 or 45, I would still have to find something to do.
In reality, I want to release the tether to a day job. I’d like to control my own finances and be able to spend time with my family, all while growing my income. I don’t like the fact that I spend half of my waking time at a desk in an office with people that I don’t deeply care about.
Because of that, I will take the steps I need to replace my income with income streams I can control completely.
Put Actions to Your Goals
So now what? The next thing to do is build a roadmap. Take your goal and your end date, and begin listing out the steps you need to take to get there.
Maybe the first step is open an investment account and deposit $500 a month. The second step can be decrease your spending so you can save an additional $250 monthly, and so on and so forth.
Your steps are all little goals along the path to your main dream. As you accomplish them, you get one step closer to this grandiose financial pinnacle you want to reach.
The issue with so many people is that they have an idea, but they never define it, and they never put actions to it. People have plenty of motivation if its directed in the right way.
Start writing out your dreams and the actions you’ll take to get there. Before long, your goals will become a reality, and after that, you can start to spread your wings wider than before. Maybe your goal now will become a stepping stone to a much larger one in the future. You can’t get anywhere if you don’t start going in the right direction, though.