What’s the reward? It’s peace of mind, less stress and a brighter financial future.ĭon’t worry too much about only having the best goal. You’re spending it on an extra credit card payment. View that money as “spending.” You’re “spending” $50 this week - taken automatically out of your checking account into that separate savings account - on that house down payment. Saying “I want to have good credit, no high-interest debt and $5,000 saved for a house down payment in five years” is a great SMART goal, for example. Not only that, having a clear central goal can be inspirational, making it feel like less of a sacrifice to be putting money aside regularly for it.Ī good goal is a SMART goal: it’s specific, measurable, achievable, relevant, and time-limited. Those are all realistic goals for most people if they stick to them. What are your financial goals? If you’ve got some extra cash, what can you do with it that’s in line with what you want out of life?ĭo you want to own a home someday? Do you want to just get free from debt? Maybe you want to buy a decent car that runs well? You might also want to consider other uses for that money burning a hole in your pocket beyond just an emergency fund. There are also tools that can help you evaluate your spending and set goals quite easily from your smartphone. That’s just one use of technology for helping you with your money. Make it hard to get, so that you only grab it in an emergency or after some careful consideration. Get that money out of sight and out of mind, and then treat it like an emergency fund. Open up a new savings account at another bank, one you can’t easily access, and then set up an automatic transfer to pull some money from your checking account into that savings account the day after each paycheck arrives. In your more thoughtful moments, you can see that the money should be used better, but when it’s just sitting there burning a hole in your pocket, you want to spend it and rational thinking just isn’t going to cut it. Start automating your savingsĪnother aspect of this problem of money burning a hole in your pocket is the sheer temptation of money sitting there that you can spend. You’re building a better personal “money sense” for yourself every time you do this. ![]() Whenever a bank statement or credit card statement comes in, go through each of the items on it and ask yourself, “Do I even remember this? And if I do, do I regret it?” If you don’t remember it or regret it, think for a moment about that expense and how it was just a waste of money. Get in the habit of doing this regularly. What you’re doing right now is training your mind to have a better sense as to what things actually matter to you. It’s OK to say “yes, that was good” to some of them, but if you’re being honest, a lot of them are going to leave you with a “no, that wasn’t a good move” feeling. If you do remember, ask yourself honestly whether or not you’re still glad you spent that money. Now, ask yourself honestly: for each one of those expenses, do you even really remember what that was? If you don’t, it doesn’t give you much value for your money.
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