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Unrealistic Savings Goals, And Why To Avoid Them.

Updated: Mar 28

Financial tip of the week:

Do not stress yourself out trying to save hundreds of dollars at once. Saving takes TIME. If all you have left at the end of the week before payday is $5, save it. You will accumulate much more money saving in small increments than OVER saving, eventually dipping back into the savings because of unrealistic goals.

When you set a fast-ticking clock on a goal, the only thing that happens is you become stressed out and likely do not make that goal, or if you do somehow make it, other things get put on the back burner because of it. To create a healthy, safe financial environment for yourself, you have to take the proper steps to tackle those issues ahead of time.

Everyone knows saving is hard. We all want to have millions of dollars in the bank and be able to live in nice houses with nice cars. All of those things start and end with financial literacy. When you can see a goal further out than a few weeks or even a few months, you begin to take the reins on financial control.

When you get paid and you establish your budget and find that you have around $150 a week left over, take $5-$10 of that money and put it somewhere you cannot see or easily access especially do not put this money in your wallet or car. This defeats the purpose of "out of sight, out of mind". When you put money in places you cannot easily access you're more likely to think twice about those major purchases you make. When you remove the temptation, you're less likely to go all the way back home and then come back out for a singular purchase. My favorite way to save is to hide it in odd places around the house. I throw all my spare $1's and $5's in my safe and when I'm ready to make a purchase that I've taken time to think about, I pull it out and make it. The largest mistake we make is not thinking twice about whether or not we need to have something. Sometimes, it can be something silly like Pokemon cards, but when you buy 10 packs instead of $5, you're at $50.

Prepping your mind for financial literacy is not easy. I don't want anyone to mistake me when I say this: financial literacy is HARD. You have to work for this every single day. You have to wake up making a valuable effort not to see, spend, see, spend. Every week you allot yourself $20-$40, depending on your budget, for fun money. Go get your nails done, take a day to relax at the park with your favorite music and food, and get yourself some "you" time in. It's important to know your money isn't JUST going to bills and survival.

More important than saving money is knowing how to save money. If you throw random amounts of money in savings each week, you'll never have a baseline of what to expect when budgeting your monthly bills, also making it much harder to accumulate the wealth you seek. Psychologically, if you repeatedly cannot find a way to save money without constantly throwing yourself off balance, it's because you've not yet figured out how to save that money.

If you make $1000 a week before taxes, with no 401k or health insurance coming out, you should take 2% of your money and put it into savings ($20). When I say "put it into savings", I mean to put it wherever is comfortable but almost inaccessible. A shoe box in the closet, a small bedside-size safe, and a safety deposit box (a personal favorite). It doesn't matter what your method is, but whatever you choose, do not keep it on hand or easily reachable. You will spend the money you have in your hands 9/10 times. If you have compulsive spending issues as I do, you'll quickly begin to appreciate not having it with you, even if it is just $20.

Over the course of 1 year at $20 per week, you've effectively saved $1040. If you put this into an account with an interest of 4.5%, you can let your money make you money! You don't have to be rich to play the same game. If you are one of the rare individuals living without a car payment, student loans, or both, consider yourself blessed and double every number I said before. If you don't have those two major bill breakers every month, you can afford the extra $20 a week and double the potential I just stated. $1040, $2080, neither of these amounts is anything to scoff at. I know plenty of folks who believe that amount would change their lives.

When you manage to save a surmountable amount of money, over $100 first, celebrate that milestone (with like a cupcake or something; don't go crazy). Over $500, give yourself a nice pat on the back, and maybe that "fun money" we talked about earlier goes to a nice dinner in honor of your achievement. Over $1000, celebrate. Every milestone you hit, celebrate. If you don't have friends/family who would celebrate with you just because they're proud of you (not to hit you up for $20 the second you tell them you've saved $20), send me a message! I will celebrate with you!

Learning to be happy with the small amounts we can do for the time being is huge. You have to be able to manage $500 to be able to ever hope to manage $1000. Never forget that no matter how much money you make, there will never be a limit where you can spend without thinking (unless you have hundreds of thousands of dollars in the bank and that same amount coming in monthly). If you have made $500 a week and suddenly get a raise to $1000 a week, unless you have financial literacy you will eventually find a way to spend $1000 a week and continue living paycheck to paycheck. Subscribe to my blog to stay financially fit!

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