Start Saving Money

 

 

 

We all want to start saving money, whether we are students, employees, retirees or a couple who have just given birth. Our goals differ from one person to another, but what we may share is not knowing how to start that journey, as thinking about saving may be easy, but developing an appropriate plan for those goals is what can be difficult at times.

 

 

Do not worry, in this article we will talk about steps and tips that will help you succeed in your journey.

 

 

● How do you plan your financial goals?

 

● How do you prioritize these goals?

 

● How do your budgets divide your money?

 

● How do you adjust your goals to your needs?

 

 

First: List a draft of the goals you want to achieve

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When you sit down and start making a list of all the things you want to achieve with your money, chances are that your list will be longer than you expect. That's why it's worth taking the time to write down each goal, you never know, you might remember something important!

 

Some of your goals could be as simple as saving up for holiday gifts, they could be as important as getting married or buying a car, or they could be as important as emergency home repairs or (God forbid) surgery. Whatever comes to your mind, put it on the list.

 

At this stage, you must collect the information you need, for example the amount you need to save to achieve your goals. Will it cost you hundreds of riyals or thousands? Do you need a month? Years? Decade? You have to set a time period and a material amount for each goal separately.

 

 

Second: Prioritize your goals

 

After thinking about what you want to achieve, you can then start formulating ambitious financial goals that are achievable in an intelligent way. Or what is also known as SMART goals; The SMART goals model is known in the business environment, when setting goals for companies, initiatives and projects - and we can adapt this model even to our personal goals. SMART goals adhere to these criteria:

 

Specific clear

Measurable

Actionable achievable

Relevant is related to you

 

Time bound is associated with a time frame

Below we will explain how to formulate your goals the smart way:

 

  

Clear Goal

 

Your financial goals belong to you and only you. It is not about what people around you expect. Prioritize your goals, whatever they are, according to their importance to you only; Start by setting the most obvious goals, and we'll turn that goal into a SMART goal,

 

 

Measurable Goal

 

  

 

In order to ensure that you achieve your goals, you must make them measurable. The measurable goals are linked to a specific number, this number may be a monthly amount that you save, or the final value of that goal, such as the amount of the car purchase advance; Now back to our previous example, and we'll put a measurable number for it:

 

Achievable Goal

 

 

 

 

An achievable goal is one that you can achieve because it is realistic. You have to think about how to determine the monthly amounts to achieve this goal, review your consumption expenses to see where they can be reduced. Maybe you could cook at home two more days a week instead of eating out at restaurants and put the surplus you saved to pay down your debt instead. Make sure you set goals that seem challenging but are achievable to add how you can achieve that goal.

 

  We'll go back to the previous example and make it realizable in the following way:

 

A Target Related To You

It is essential that your goals are consistent with your financial situation and investment goals, as it is unreasonable to set a goal to buy a luxury car while you do not yet own a home, or to try to save money in an unorganized manner (without relying on investment budgets or portfolios). Setting priorities, thinking about the context, and your ability to identify the appropriate relevant resources and their interdependence with the financial situation in which you live are among the most important elements of smart financial goals. Now let's take our example and make it relevant to your financial situation:

 

Target With A Time Frame

 

 

 

 

 

It is also essential to commit to achieving your goals within a reasonable time frame and to follow various methods that allow you to stick to a schedule. This standard from the SMART Goals framework is intended to help you avoid overstaying your goals. Give your goals a target date to achieve them, or a time frame to stick to based on your current sources of income.

 

To make our example bound to a time frame, we'll add a specific date for achieving our goal:

  Remember that prioritizing your goals doesn't mean you can't achieve lower priority goals. For example, you don't have to be afraid of paying off a debt and investing at the same time. The list helps you see which goals are most important to you.

 

Third: Divide your budget according to your list of goals

After you have determined the amount of money and the time period that you need, and arranged your priorities, you must now know what you can actually achieve. Calculate how much you need to save each month to reach each goal, using the amount and the time period you set. It is okay for it to be beyond your financial capacity.

 

Arranging the numbers in a list and placing them in order in front of you helps you ask yourself questions such as:

 

“Will I be able to achieve all of these goals within the time frame specified for this goal?”

 

"Would I be willing to delay one goal in order to reach the other goals?"

 

If you are planning to invest to achieve one of your goals, you should also consider the amount expected to be earned to achieve these goals through your investment account.

 

In a previous article, we talked about how to set flexible and appropriate budgets for your income through Mala'a application

 

How To Plan Your Budget Simply?

 

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Fourth: Make your financial goals work automatically

Making your goals work automatically is the best way to achieve them. So it's best not to make the mistake of pausing your goals.

 

Setting auto deduction helps you achieve your goals faster and easier, as it makes it easier for you to set a budget for each goal, and auto deduction helps you not to forget a month, for example. This strategy is often called "pay yourself first", because you put your money into the things that are your highest priority before you spend it on anything

Abstract (Butter 🧈)

 

 

 

 

 

 

Some of your goals may be as simple as saving for a new phone, and they may be as important as getting married or buying a car. It is essential that your goals match your financial situation and investment goals; It is also essential to commit to achieving your goals within a reasonable time frame; Remember that prioritizing your goals doesn't mean you can't achieve lower priority goals. For example, you do not have to be afraid of paying off debts and investing at the same time. The SMART goals model is known in the business environment to set goals for companies or initiatives and projects. You can adapt it even to your personal goals. Be sure to set goals that seem difficult but achievable to add how you can achieve them.