Are You Sabotaging Your Savings? 5 Questions to Ask Yourself
A little while ago, you sat down and got serious about saving…and now you’re frustrated. Despite doing all the right things like tracking your spending, formulating a budget, setting some savings goals, you never seem to make much headway. Sound familiar? You may be undermining your good intentions with a little subtle sabotage. Ask yourself the 5 questions below to see if this might be the case. You can always seek help from a professional financial advisor to see what is, and what isn’t, working in your savings plans. There are plenty of these agencies around, of which Positive Solutions Finance is but one example.
Have You Set The RIGHT Goals?
What does this mean? It means are your goals too big, or too unrealistic? If you’re planning a weekend break out of a six month savings strategy that will probably work; to attempt to put away a home deposit in this time is setting yourself up for failure.
Are You Sabotaging Long Term Goals For Short Term Ones?
It’s a good idea to incorporate short, long, and medium term goals into your savings plans, but ensure they are all in sync. If your short term goals will use up everything you save, you’ll never make much headway on your other goals. This is a recipe for frustration and poor savings results.
Are Your Goals Clear?
When setting your savings goals, be as specific as you can. A clear goal should include an amount, a timeframe or deadline, and a bit of a stepped out path to its achievement. The ‘What’, ‘When’, and ‘How’. The ‘Why’ comes from your clear purpose in wanting to achieve your financial outcome and the ‘Who’? That’s easy – that’s you.
Do You Have A System?
Systemising your savings is a great way to undermine your undermining. Set up a savings account and ensure a certain amount flows into it automatically each pay cycle. You can even set up a few; one for long term goals and one for short or medium term goals. This way, you are less tempted to overspend and most of your saving is done for you.
Do You Have An Emergency Fund?
Some people consider their savings as their emergency fund; this is a form of self sabotage. If you have specific savings goals then that is what your savings are for. You should have a separate arrangement for emergencies, or you’ll find your savings dwindling away as the car needs a new part, or someone needs urgent medical assistance. Your contingency funds should be separate and distinct from your savings.
Having a savings plan and setting financial goals are very good steps to take towards sound management of your finances. However, it’s important to know your own weaknesses too – and to guard against any tendencies you have to get in your own way. Plans are all very well, but taking smart, consistent actions towards your financial goals is really the only way to save successfully. What are some of the sabotage tricks you catch yourself playing? Share your insights in the comments box below.