What are your goals? Maybe you’d like to run a mile or ace that big science test. The key to reaching your goal is planning out how to get there. The same is true for saving money. The right plan can help you save $50 for a new video game, $150 to see your favorite singer, or even more. These five time-tested steps will help you succeed.
Step 1: Get Specific
Decide exactly what you want. Then research how much it will cost. Do you want $20 headphones or wireless Beats headphones for eight times the price? Wait one week. If you still want those headphones, you’re ready to take the next step.
Step 2: Set a Time Frame
Is this a short-term goal that you’d like to achieve in a month? Or is it a long-term goal that could take years to reach? In an ideal world, we’d all get what we wanted immediately. Unfortunately, that’s not always possible. Waiting is difficult, but it’s an important skill to master. The next step will help.
Step 3: Establish Benchmarks
Break your goal into smaller steps, or benchmarks. Lauren is saving $700 for a school trip. Say the trip is a year away. Lauren could divide the total cost of $700 by 52, the number of weeks in a year. That comes to $13.46. She’ll have to save that much each week. (The math: $700 ÷ 52 = $13.46.) Doesn’t that seem achievable? “People don’t meet goals when they bite off more than they can chew,” says economist Sarah Newcomb.
Step 4: Picture Success
Cut out a picture of the bike you’d like to buy or the amusement park you’d like to visit. Hang it where you’ll see it every day. The image of your goal should keep you on track. Next, imagine overcoming an obstacle to your goal. Let’s say you’re tempted to spend money at a bake sale. Come up with a strategy for overcoming the temptation, like bringing in an extra treat.
Step 5: Track Progress
Stay motivated by checking your savings progress regularly. Give yourself a pat on the back each time you inch closer toward your goal. If you miss the mark, think about what went wrong. Did something distract you? Or was your goal too challenging?
“Look at it as a learning opportunity,” says Robin Taub. She is the author of A Parent’s Guide to Raising Money-Smart Kids. “Everyone fails, and that’s when you grow. Use the lessons you learned to save like a pro for your next goal.” —By Hayden Field