The first day of every year presents the opportunity for many to reassess their life goals—and set new ones. Sadly, a few months later, those goals set with enthusiasm and high spirit either turn to dreams or wishes. For those struggling to save money, the key to success often begins with prioritizing your saving goals.
What is a realistic saving goal?
Perhaps, the reason why you are not hitting your savings goals is that you are setting unrealistic goals. Every saving needs to be backed by a purpose. Having a purpose behind your savings helps you to stay focused. The three main reasons why people save are;
Once you have determined the purpose of your saving, follow these steps to prioritize your saving goals.
1. Setup a functional budget
Regardless of the category your purpose, budgeting is a vital part of saving. Before you can save effectively, you need to identify how you spend your money. You cannot save more than your budget allow. Therefore, a realistic saving goal should consider bills, groceries, and other daily or monthly expenses. You can leverage budgeting tools to automate your budgets.
2. Work out your net worth
While budgeting tells you how much you can save, your net worth determines how soon you will start saving. Net worth is simply assets minus liabilities. Assets bring money while liabilities take away money from you. So, if you have a negative worth, your priority should be debt settlement. However, if you have a positive worth that is not so high, savings and investment should be your priority.
3. Separate short from long-term goals
The way you save for long-term goals is different from how you save for short-term goals. For long-term savings, you need to leverage on platforms that compound your interest. When you group savings based on time, it helps you to determine what to prioritize.
With Very Good Collection, you can create unlimited virtual cards. This is one smart way you can use to control your spending and grow your savings. Give it a try today.