Five Minute Finances #14: Set A Tangible Savings Goal – And A Reminder Of That Goal

Five Minute FinancesFive Minute Finances is a series of tips on how you can save significant money or reorganize your financial life in just five minutes. These tips appear Monday, Wednesday, and Friday on The Simple Dollar.

One big factor for saving money that many people miss out on is motivation. For me, constant reminders of what I’m saving money for help me greatly to avoid spending money on unnecessary things. Here’s a gameplan for quickly finding motivation for saving.

Find a picture online of what you’re saving for. For me, I found two pictures: one of a house that I really liked (saving for a down payment) and a picture of my toddler son (reducing debt and saving for college).

Figure out how much it will cost (approximately). I estimated the cost of a down payment and also the cost of about a third of a college education in about eighteen years. The numbers were quite large, but not so large that they felt unapproachable.

Print out a few copies of that picture with the cost as a caption. I printed out five copies of each one. I actually put the numbers in bold on each picture near the bottom.

Place that printout several places you will see it. I keep one or the other wrapped around my credit card in my wallet so that any time I plan to whip out plastic, I see my son’s face or the home I’d like to have and I rethink the purchase. I keep them in other places, too: on the dashboard in my truck and so forth.

These reminders were very easy to make and help keep me on pace for saving money.

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  1. Brett McKay says:

    I think in addition to stating exactly how much you want to save, it’s good to put when you want that money. Having an exact date makes the goal even more concrete and more pressing.

  2. Anne says:

    I really like this tip but find I can’t apply it to my own life. There’s nothing I’m saving FOR really, I just keep saving. I’m a grad student with no plans for a house, car, or any big purchases.

  3. !wanda says:

    Same with me, for the grad student thing. It would be actively dumb to try to buy a house in my geographical area now, especially because I intend to graduate in the next few years and move away. I don’t plan on having children. I can already afford a decent used car outright, but the public transit here is working well for me now, so I can’t justify either the initial or the ongoing expense of a car. My long-term goals are mostly career-related, and the best I can do to fulfill them is doing my research well. Hopefully, my job will be interesting enough so that I never want to retire! I save anyway, though- at least a fifth of my gross income. I’m sure I’d save more, though, if I could see a use for it.

  4. js says:

    Agreed. The only tangible thing I save for is retirement (and that’s still 20-30+ years off). I don’t plan to have kids, I don’t plan to afford a house in CA. I do want money in case I decided to quit my job I guess.

  5. JJ says:

    !wanda – I don’t know the details of what will happen when you graduate and move, but what about picking a city you where you would like to live and work at that point … figure out 3-6 months rent and living expenses, maybe a little more for the cost of moving … and try to have that waiting for you in an account when you graduate as a present to yourself to make that transition period verrry easy?

  6. TF Miser says:

    These are good tips. The tip about wrapping the credit card with your goal is one that I included in a post “5 Ways To Not Use Your Credit Cards” that I published on my blog last month.

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