Set your financial goals
Most of us find it difficult to get down to the hard work of saving money. The desire for instant gratification is a basic human instinct. And resisting the urge to spend is made even harder when retailers tempt us to splash out on Christmas and the Boxing Day sales.
But people who have some clear purpose, or project, will find the task of cutting their expenses much easier.
The first part of your plan is about setting goals. Your goals don’t need to be big or long-term, but they must be important to you. What would you really love to accomplish? Here are some examples of short, medium, and long-term goals:
Short-term financial goals could be to save enough money to cover the cost of your next summer holiday, or buy a new car.
Medium-term goals might be saving up for the deposit on your first home, paying for your child’s student accommodation, or a round-the-world trip.
Long-term goals might involve saving up for a retirement that leaves you free to travel, pursue your hobbies or learn new skills. Or, maybe you want to build up a fund to help your children or grandchildren in the future?
Whatever your goals, having one or more of them gives us a strong purpose to go out and accomplish our aims. It also helps you say no to short-term temptations, and instead focus on what is most important.
Whenever you’re finding the motivation to manage your money a chore – and most of the time you probably will – remind yourself what the outcome will be: a new car, the pride of owning your own home, helping your children get the best education, or spending time travelling the world.
List all of your goals and divide them into short, medium and long-term. Put a rough financial cost against them – don’t worry about future costs and inflation at this stage, just note how much they would cost if you had to pay for them today.
Now read step 2
Retirement on the horizon? Find out what your options are.
Use our tool to find out what your pension might be worth when you retire.
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