If you have sat down, and worked out some great “life goals”.. things you want to do right away, and things you want to do in the future, then you now have motivation.
Motivation is the keyword, for financial planning and making a budget. If you have something you are working towards, then you are more likely to stick to a plan or a budget. Motivation is a powerful tool.
With these goals in mind, you have to sit down and work out a plan of how you are going to accomplish these goals, and how much you are going to need financially etc. Its good to have some short term goals, as well as long term goals, because you need to see something quickly if you are going to stick it out in the long run.
If your long term goal is to buy a house, but in the meantime you are watching a TV with aluminum foil and rabbit ears for reception, then to keep up your motivation, you need to allow for a short term goal, such as a new TV. (I don’t mean the monster big screen, just something you can afford without credit!).
With a series of short term goals, or rewards as I call them, you are more likely to stay on track with the long term ones. Setup, an automatic payment system through your bank to transfer your long term goal money into a savings account that you DON’T touch. Set up another savings account for your short term goals, and try and add money to this account by watching your daily spending etc.
When we are trying to save every penny for something a long ways away, we are likely to slip, we are human, and need some rewards along the way! This doesn’t mean load up your credit cards, this means using money you actually save up! Even if it just something small… just something.
Having financial goals, is a good way to stay on track. After all, if you found out that by cutting out those expensive latte’s and gourmet muffins you have been buying daily, that you could take a nice vacation each year, wouldn’t you do that? I would hate to think I missed out on something great, just because of some coffee on the way to work. Those daily spending habits add up quickly.
Even if you saved 5.00 dollars per day, that would be 25.00 per working week, 100.00 per month, or 1200.00 per year. That can go along way towards a vacation or something you want.
Take the time and write down your life goals, and then make a plan of how you are going to accomplish them. A financial plan can be a powerful tool, once you have found something to look forward to.