After a long holiday season making merry, most people arrive on the other side of the new year hoping to save some money. But a few days, weeks, or even months down the line, something happens: you go from highly motivated to totally uninspired, and you’re nowhere near achieving your goal.
If your plan to save more in the new year is starting to go off the rails, check in with this quick guide to get back on track. It covers the SMART way to set your goals, so you’re more likely to succeed.
Make your goal SMART
SMART goal setting is a technique that aims to remove vague promises from your New Year’s resolutions. It’s a way of setting and tracking realistic goals that have clear timelines with smaller goals or check-ins along the way.
More importantly, it’s a helpful acronym to walk you through every step of your goal, standing for:
S — Specific
When you say you want to spend less and save more, you’re committing one of the biggest mistakes of goal setting. As this goal stands, there’s no way to quantify how much “less” you want to spend or how much “more” you wish to save. Without these clear definitions, it can be hard to know whether you’re on the right track.
The aim of this step is to answer the 5Ws or:
- Who — this one is the easiest, as the key players will most likely involve you!
- What — outline what you want to achieve in exacting language.
- When — give yourself a deadline when you want to achieve this goal.
- Where — is your goal professional or personal in nature?
- Why — answer the reason why you should achieve this goal. Do you want to save up to go on a vacation, or do you want to save so you have an emergency fund?
By making your goal specific, you clarify the difference between wanting to save more and putting $1,000 in an emergency fund by the spring. With a well-rounded emergency fund, you can turn to these savings first before you need to apply for a payday loan.
M — Measurable
This next step helps you break down your final objective into several, measurable steps. By breaking your New Year’s resolution into smaller tasks, you may find the final end goal to be less daunting.
So rather than saving $1,000 by the spring, you would suggest putting away at least $100 every week into your emergency fund.
A — Attainable
Now it’s time to gain some perspective on your plans so far. Is what you’ve established practical for the timeline you’ve chosen?
If the answer is ‘no’, then you may find it challenging (if not impossible) to achieve your goal successfully. But that doesn’t mean you have to scrap it entirely. Find the weak spots in your goal and see what changes you need to take on to make your goal attainable.
You’ll have to look at your budget to figure out how much you could set aside each week in savings. A budget may also show you spending habits you can cut down on to free up extra cash.
In some cases, something as simple as the energy consumption tips from MoneyKey could be the way you achieve this smaller task. In addition to facilitating installment loans for their customers, an online lender like MoneyKey offers practical tips for reducing monthly utility bills on their blog. If you manage to reduce your energy consumption successfully, you could free up more of your cash to go towards your goal.
R — Relevant
The next step piggybacks on the previous one with more of a focus on how likely you’ll actually stick with any changes you need to make to meet your goal deadline.
Sure, you can say you’ll repair every crack in your weatherstripping, make a draft stopper, and start washing your clothes during off-peak hours but are all three of these steps realistic? Do you know how to repair weatherstripping or sew a draft stopper? Does your schedule allow you to wait until off-peak hours to wash your clothes?
Be kind to yourself. Even though your goal may be attainable by making enough sacrifices, committing to these sacrifices may not be realistic in the long-run.
T — Timely
A sense of realism is appreciated in this last step, too. Make sure you set practical deadlines for the small steps and your overall goal. Although you wish you could say you can have $1,000 saved in a month, it’s not always possible when you have other responsibilities. Push the deadline further out, so you have a better chance of being successful.
Your motivation levels may drop after New Year’s Day, but your intention never wavers. The end goal is the same: you want to save money; you just might not have the energy to stick with it anymore.
If that’s the case, you don’t have to give up on your goals. Try applying the SMART method to your New Year’s resolution whenever you feel like you’re starting to lose track of everything. Whether it’s a few weeks after the new year or several months, don’t delay in organizing how you intend to save, so it ends up being a realistic goal you actually achieve.