Saving money and losing weight are popular resolutions people have at the start of the New Year. So how has that been going for you so far? In our last article, Happy New Years Minimum Wage Earners, we showed how residents in various states were getting a wage increase this year and of course it’s tax season so there is plenty of money up for grabs. Unfortunately, despite all of this the truth is that (just like losing weight) people start off strong but fizzle out quickly. In an article written by Melissa Dahl states that Behavioral Economist Dan Ariely, a professor of psychology at Duke University and best selling author, offers a ridiculously simple way for anyone to become more motivated to save money. So what’s this great advice
Tip #1: Know What You Are Saving For.
Nowadays there are so many experts and blogs that promote saving money. Add that to the fact that we’ve probably all heard the phrase “put some money aside for a rainy day” and that many people generally believe that having a savings is good-you would think that properly saving money would be second nature to us. Yet; despite all of this, people struggle because they have not asked themselves the basic question…What am I saving for? By simply knowing what you are saving for you begin to lay the foundation towards achieving your goal. However, as simple as this concept seems, what confuses people the most is that they are not specific.
Tip #2: Be Specific
Let’s be honest many people generally know what they are saving for but,
because they are not specific they struggle to achieve their goals. For example, instead of just saying “I’m saving for a car”…be specific. What’s the make, model, is it used or new, price range, etc-these are all questions that should be answered prior as there are plenty of cars to choose from. Another example would be saving for a house. As in the previous example questions that should be considered are: price range you’re looking for, type (ranch, colonial, condo), area, etc. The more specific you are the less cloudy the path to reaching your goal becomes.
Tip #3: Create a Completion Date
The time it takes to complete your goal is hugely important because even if you don’t have someone cheering or motivating you-having a completion date will always hold you accountable. Why? That’s because setting a completion date helps you prioritize your goals as well as eliminate many everyday excuses. We may not all have the resources to get a mentor but, everyone rich or poor, has the same 24 hours in a day to make things happen. Going back to the Dahl article, the example used was opening a college savings account. Most individuals usually start college around age 18. This means that if you started a college savings account the moment your child is born that gives you 18 years to completely fund that account. Now as far as priority goes, that’s a very different timeline compared to saving for: retirement, a car, buying a house, a vacation, etc.
By knowing exactly what you are saving for and when you want to get that goal accomplished you will find that saving money can be a simple, manageable, and rewarding task. Remember when it comes to your goals procrastination and vaguely never works in your favor.
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