Hello lovelies! 🙂
In the financial quarters, the rumblings will be about how each company is faring after the 1st quarter of the year. On a personal front, how are your finances faring? Are you finding it hard to put aside money for savings? Its hard to save for something intangible like “old age” or “a rainy day” right? So try putting aside savings for something tangible.
Our money tip today is to save money towards a goal. Its always easier to save when you have a goal in sight. Be it something small like a new lipstick or a new foundation. Or perhaps you’d like to get a nice haircut and colour to get you over the 1st quarter blues.
Or perhaps you are aiming for something bigger – your own house or car? Or even a nice holiday. Its always easier to set aside savings, knowing you have a goal in sight.
I try to have a goal in sight when I set aside savings because its nice to see something come out of all that scrimping 😉 For this, I have different “funds” that I keep track of. Here’s how I do it:-
- Identify the goal – the item you want
- Identify the cost or price of the item
- Work out when you want it by e.g. 2 months, 6 months, 1 year
- Divide the cost or price of the item by the length of time you have
- Set aside the amount monthly until you reach your goal
Identify your goal or item
This is the easy part. You already know what you want. Best not to choose something limited edition or something that is only available for a short time because that can really put a spanner in the works. Big items like cars or houses can be more daunting too but can ultimately be very satisfying.
Identify the price of the item
If its a holiday, try to work out how much you are willing to spend because this is more intangible. If its a tangible fixed price item, its easier to fix the price.
When do you want it by?
So, when do you plan to get your item? By your birthday? Christmas? As a reward for completing a project? Don’t give yourself too short a timeline or this method won’t work. I work it out by months because for many of us, our salaries come in monthly. Its always easier to put aside savings as the money comes in.
Divide the price/cost of the item by the time
To work out how much you need to save each month, divide the cost of the item by the time you have set. Then set aside this amount every month until you achieve your goal, before you go and buy it.
You too can buy an expensive item
By saving towards a goal, you will find it easier to buy something that is more expensive. Perhaps you have been eyeing a leather bag from Coach that costs RM2,000. If you start now (April) and give yourself till Christmas you will have 8 months to set aside money for it – RM250 each month. Or perhaps you’d like to pick up a Chanel Rouge Coco lipstick at RM95? Target to purchase it in 3 months and you only need to set aside RM32 a month.
Isn’t that more manageable (and less of a shock to the system) than having to take out RM2,000 or RM95 at one go without first having saved for it? 🙂 You can set this money aside in your separate bank account or just track it in a spreadsheet.
Saving towards a goal is what I do when I want something badly enough or if its a big ticket item. Its always easier and it gives me the sense of having “earned” it because you’d have had to work for it over the months you’re saving up for it and thus I derive more satisfaction from it. It also gives you the chance to contemplate if you really want it after saving up for it 🙂
Is this a money tip you already practice? If you don’t, will it be something that you might want to put into practice? What are you planning to save up towards? 😉