New Year, New Budget: How to Set Savings Goals That Last

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With the new year comes new resolutions and goals. And while we’re dedicated when we first begin, by February, things start to slip. It’s hard to kick old habits or learn new ones, whether you’re trying to be healthier or want to save more money. For those who want to learn how to set savings goals that last longer than just a couple of weeks, we have a few helpful tips and tricks to make sure you successfully save this year.

8. Be Specific

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Having a goal is great, but sometimes the more open-ended you make it, the harder it is. The best way to start saving is to have a specific end goal. For instance, you want to save for a vacation next year or finally pay off some old debt. Having a specific number in mind will help you budget properly.

7. But Also Be Realistic

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Being specific is important, but being realistic is also crucial. If you have nothing in your savings and want to save thousands of dollars by the end of spring, but you’re income doesn’t support that dream, then you’re working towards the impossible. Having savings goals can mean taking a realistic look at your budget and past expenses. Maybe you realize that you can cut back on different expenses such as ordering take-out or canceling a few streaming subscriptions.

Check Out: The Basics of Building a Budget: Step-by-Step Guide

6. Little Increments Go a Long Way

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Now that you have a specific, and realistic, goal in mind. It’s time to plan out how much you should put into savings and when. Instead of waiting a couple of months and throwing a few hundred or so into savings, it’s best to put money aside as soon as you get paid.

Here’s an example: If you’re paid bi-weekly, and want to save up to $5,000 for an emergency fund before the end of the year, then you’re looking at putting aside $193 into savings each pay period. Do a little math and you’ll be able to stay on track and budget better.

5. Set Deadlines

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Keep yourself accountable with deadlines. One deadline is common for those creating savings goals, but multiple deadlines actually make it easier to save. If you’re saving for a vacation, maybe your only deadline is $2,000 in savings by November. But to ensure you’re staying on track, have multiple deadlines throughout the year.

For example, l set aside at least $800 by April in order to reach another savings deadline by August, getting you to a total of $2,000. That way, if you start to fall behind, you can address it before it’s too late.

4. Is Your Goal Relevant?

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When figuring out how to set savings goals that last, it’s important to ask yourself if your goal is really relevant given your financial situation. While everyone deserves a vacation or to treat themselves with the money they make, there are expenses that should be prioritized over others. If you went on a few vacations over the past year, maybe this year focus on paying off overdue bills or adding more to your retirement fund.

Also Read: Travel Hacking with Credit Cards: Seeing the World on a Budget

3. Use a Savings-Only Account

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A lot of us have tried savings goals before, and every time we fail. We end up giving into an extra expense one week, and then before you know it, you’re short on cash. It’s understandable — and happens to all of us. Try using an alternate savings account so you’re not tempted to touch the money.

For instance, at the end of each week, or whenever you get paid, take out cash for the amount you want to save for that period and tuck it away in a bank account that is separate from your everyday checking. There are high-yield savings accounts out there, which are meant to keep your money and grow interest over time. This encourages you to let the money sit there and prevents excess spending or withdrawals.

2. Change Your Budget

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Ultimately, if you want to learn how to set savings goals that last, working on your budget is a priority. This will help you see how much income you’re making, how much money is being spent, and what items or activities cost the most.

It’s intimidating, but if you track everything you spend using a spreadsheet, you’ll easily be able to track your money. And then, you can break down your expenses into categories — such as groceries, transportation, entertainment — and see where you can cut costs from there.

Check Out: Savings Challenges for the Year: Fun and Engaging Ways to Save Money Every Month

1. Don’t Be Afraid to Make Adjustments

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Now that you know a few tips and tricks on how to set savings goals that last, it’s important to remember that change is a good thing. With the new year and new budget, you’re learning new habits that will benefit you in the long run.

The budget you make at the beginning of the year might have to ebb and flow, but ultimately, you’re holding yourself accountable. There will always be additional, unforeseen expenses, like an increase in rent or an increase in income. Make a habit of checking on your budget and savings goal so that adjustments aren’t stressful.