On a monthly basis, we all treat ourselves to bits and pieces that brighten up our lives. That big frappucino of a Friday lunchtime, those new boots on payday, a spa afternoon with a friend, a posh meal out with hubby. These little treats are important, and they make all the difference to how we enjoy life day to day. But what about those big goals that require a few more sacrifices, and a lot more planning? You’ve managed to put aside enough to save up for a particularly expensive coat, or perhaps for one night away to the countryside, but never anything bigger. So how do you do it? How do you effectively save up enough money for a big goal?
Take a look at the following basics of saving money for a big goal to start your journey towards hitting your personal financial targets:
What Is Your Goal?
The 2nd most popular financial goal for 2017 was to save up for a holiday. However, financial goals are different for everyone. Knowing your financial goal will make you much more likely to stick to any savings plans you have. You might think you know your goal, but have you really thought about it? Have you checked how much your dream holiday costs with spending money? Do you know how much of a deposit for a house you would need given your current financial status? Getting an exact figure in mind for your dream purchase will be a great start to saving for it. Make a mood board for your dream with pictures, videos and inspirational quotes and put it on your wall to remind yourself of why you’re working hard to save every day.
What Are Your Financial Vampires?
There will be financial vampires sucking away at your hard earned cash. Everyone has at least one, no matter how hard they work on ensuring they are smart with money. Identifying these vampires means you can cut them off and pocket that money for your goal. For example, according to statistics the average household spends nearly £80 on transport a week. Could you take a bike? Walk? Take a bus? Do park and ride? It is essential you get to and from work, but not essential you do it the most expensive way.
Here are some common financial vampires:-
- Utility bills
- Rent or mortgage
- Weekly food shop
- Direct debits you haven’t stopped
Of course you can’t just stop paying these bills, but you can trim them down, so they stop leaching so much money from your earnings. Ring those utility companies, look at shopping at a cheaper supermarket, look into energy saving tips, figure out how to cut your phone bill down – do whatever it takes to gain big rewards.
What Are Your Financial Habits?
You may have financial habits that are causing you to lose money, and you don’t even realise. Maybe payday you buy all the food and drink you couldn’t afford in the month during a trip to the supermarket on top of your weekly shops. So you’re blasting an extra £100 pounds without even thinking about it. Maybe you spend online a lot so you don’t notice little purchases here and there because you don’t check your online banking in that much detail. Think carefully about your spending habits and if you can’t identify a pattern, ask your partner, or look at your bank statement for the last month. Identifying these ingrained behaviours opens up an opportunity for saving money.
How Could You Get More Money Coming In Every Month?
Could you go for a promotion at work? You could easily stay in with the same company but make a bit more money in a job a step up from your own, just ask around.
Could you make money writing or designing online in the evenings? There are 1.4 million freelancers in the UK, with sites like Upwork and People Per Hour, you could easily become one of them. Could you walk some local dogs for a bit of extra cash? You get exercise and they get exercise, you get paid – everyone wins!
Could You Get More Lump Sums?
There are probably lots of little things you can do to give your savings a little boost. How about decluttering for spring and selling items you no longer want online? Items only worth small change – do a carboot to sell them and make a quick £50 on a Sunday morning. How about that exercise bike in the garage you never use? Get it on a boot sale app and have it gone in exchange for £60 by the weekend. These tiny lump sums will all help you get to your goal amount quicker.
Use A Separate Savings Account To Your Regular Bank Accounts
A lot of people make the mistake of setting up a savings account online along with their regular bank accounts. This is a problem because it takes a second to transfer any money saved without making you think about the consequences. If you set up a savings account with a different bank, you will have to work a lot harder to get money out. You could also make it a monthly event to physically take the cash into the bank and put it in your account which will make you feel like you’re taking significant steps towards your goal.
Get Rid Of Debt First
Don’t save up money instead of paying off debt. Your debt is costing you money so it will pay in the long run to get rid of it. Don’t know how to get it paid off? Debt counselling from National Debtline or Citizens Advice Bureau may help.
Budgeting will help you make a real plan, based on all the information you have gathered about your finances. It will take some time to make it realistic because you have to collect information and you have to set mini goals in order to get to the end goal. For example, you might have to figure out how to make an extra £50 a week with an extra job, or you might have to put plans to pay a debt off and then start saving. This little YouTube video on making a budget is handy, or take a look at this more detailed guide.
Be Driven, But Enjoy Yourself
It is so important to be focused, organised and driven to succeed in reaching your goal. However, you still have to enjoy life in the meantime! For example, if you have a coffee every morning from a coffee shop that is £3 pounds a day, you could save £60 pounds a month if you cut that out, or you could save it for a Friday treat and instead save £48 pounds. Balance how much you want to reach your goal with having some enjoyment of life so that you don’t end up resenting your goal. Have a minimum savings amount to hit, then a few extra savings you can add if you want to, then there is some leeway. As long as you’re working hard to reach that goal most of the time, you’ve nothing to feel guilty about those few times you might have a little slip.
I don’t focus on what I’m up against, I focus on my goals and try to ignore the rest – Venus Williams
Be honest, be driven and be organised. Remember every step you make, no matter how big or small is a step towards achieving your big goal, which will be worth the effort when you get there.