Many students who come into the Student Money Management Center want to save more or spend less, or both, but find themselves lacking the motivation to accomplish these things. One of the easiest ways to motivate yourself is to set financial goals. Students and everyone should have a variety of financial goals- some short-term, some mid-range, and some long-term. A short-term goal could be to save up for a new laptop or a summer or fall break trip coming up in the next 6 months or so. A mid-range goal could be to pay down $2,000 of your student loans before you graduate in a couple years. A long-term goal could be to save up a down payment of $5,000 for a new car in five years or to have $10,000 in your retirement accounts by the time you’re 25. Everyone needs goals with different time distances because not only do you need to stay motivated now, but you also need to always be looking forward to your financial future.
Now how does saving for and setting goals relate to spending less and budgeting? They go hand in hand, actually. The best way to motivate yourself to spend less on clothes or at the grocery store is to remind yourself that you are saving for something. If you have no incentive to spend less except for the fact that you want to spend less, it can be hard to say no to yourself.
Next, make sure you have a plan for how you are going to achieve your financial goals. Make sure your goals are realistic, first off. If you want to go on a $1,000 trip after finals in May and you are only making a couple hundred dollars per month, it’s going to be hard to save up that much money in only a few weeks. You need to plan out how much you need to save per month, or per week for shorter goals, so that you know how much you need to save/cut back on spending to actually achieve your goal. Also identify how much of your current savings you are willing to put towards this goal. It can also be helpful to determine at the beginning which budget categories you want to cut back on to save money for your financial goal. Make saving for your goal a budget category in itself- and transfer the money out of your checking account into your savings account right after you get paid so you won’t even have the opportunity to spend it. If you need help creating or planning for financial goals, come see us in room 237 of the City Union!