Sometimes the best way to save money is to set goals for what you want in life.
Goal setting is a rarely used skill yet has been shown to be very effective in helping people achieve what they want.
Here is how it works:
Suppose you want to go on a vacation. You do your research and you figure out that with the best deals you can find, the trip will cost $500.
Now you don’t want to go into debt to take a vacation so you need to save the $500 beforehand. Since the trip is in three months time, you will need to save $500 over 3 months = $167 / month or $42/ week or $6/day.
When you break it down into smaller bites like this, it becomes much more manageable. It is much easier to think of ways to save $6/day and it gets the creative juices flowing for how to go about it.
This idea can also be applied to much larger goals. Say you want to go back to school in two years. Or you want to save up enough for a large down payment on a house in three years time. By figuring out how much you need to save on a weekly or daily basis, you’ll be able to determine if your goals are achievable. Perhaps to make it more do-able, you’ll only need to readjust the timeline somewhat.
So do you set goals for yourself? What are your favourite ways to save money in order to meet your goals? Do you set larger goals for yourself?