Make specific goals: Even if your financial goals don’t differ substantially from the list above, put your own unique number to it. If your monthly expenses come to $2,500 and you want an emergency fund that covers three months of expenses, you need to save $7,500. If you have two credit cards you want to pay off, each with a $500 balance, you’ll need to set aside $1,000 plus any interest payments and fees you’ll incur. If you want to save for a down payment, what price range can you afford for a home and what percentage are you hoping to put down? Get granular on the details.
Rank your goals by priority: Which goals are the most important to you? While financial advisors will often recommend you work towards multiple financial goals at the same time—especially building an emergency fund, saving for retirement and paying off debt—you will need to determine what percentage of your income you want to direct to each fund.
Break down your goals into monthly steps: Let’s say you’ve decided your top goals are to build an emergency fund, save for retirement and save for a down payment for a house. How much money can you devote to savings per month? If you have $500 of income that you can allocate to savings on a monthly basis, you could put $200 in your emergency fund, which means you would reach your goal of saving $7,500 in a little over three years. You could allocate another $200 to retirement savings and put the final $100 towards your down payment savings goal.
Create a budget: You may already have a budget, but it’s time to officially add your savings goals to your spreadsheet, app or whatever you use to track your spending. By making your savings goals a part of your overall financial plan rather than something you always mean to do and never get around to, you can keep those goals high on your priority list.
Cut spending: One of the quickest ways to accelerate your progress towards your savings goals is to cut your spending in another area and redirect that money towards savings. Are there subscriptions you don’t use? Are there services you could do yourself? Are there luxuries that you don’t enjoy enough to justify the money you spend on them?
Automate your savings: Another way to make your savings goals a reality rather than a pipe dream is to automate them. Set up an automatic 401(k) contribution with your employer. Set up an automatic monthly transfer from your checking to your savings account. Automate your credit card payments. By taking away the opportunity for you to decide to skip it, you can solidify the habit with minimal effort.
Use mistakes as learning opportunities: Let’s say you impulse bought a new pair of shoes with money that could have—and maybe should have—been put towards your savings goals. Rather than beat yourself up about it, ask yourself why you made that decision. Was it emotional? Did you feel peer-pressured? Did you actually get joy out of the purchase or did you just feel bad for not making a better financial decision?