The other day, I was laying on the couch thinking about budgeting (is that normal?). I was trying to figure out why people do or do not create budgets. I had probably spent about 15 minutes brainstorming it when I decided to ask Mike's opinion.
Mike is really good with his money- he actually checks Mint.com more often than I do, which is very impressive- but I also know that he has never budgeted. So I used him as a guinea pig (best part about living together? he can't escape my personal finance questions, muahaha) and asked him why he doesn't do it.
He didn't even stop to think about it... he immediately knew the answer. He said, "because I don't have anything to budget for!"
(isn't that the way it always goes? you sit and think about something forEVER without coming up with an answer, but the second you ask another person they come up with the perfect response? ugh)
Anyway, his response made me realize how important it is to have financial goals. If you aren't working towards anything specific, you have no reason to watch your spending! I have always been a very financially focused person, so I've almost always had a financial goal. But I know that I'm not the norm and there are tons of people out there who have no financial goals!
So today, let's discuss WHY you should set goals!
Why should you set financial goals?
1. Motivation. Without a goal, you aren't motivated to accomplish anything. But by setting a goal, you can monitor your progress and kick your butt into gear if you start slacking off.
2. You're more likely to achieve your desired results. If you don't have a specific goal, you're probably not going to achieve the results you want. You can't just hope that you're going to save up enough for a European vacation, you've got to set a goal and DO it!
3. Confidence building. Once you set and achieve your first goal, you'll be so proud of yourself! That feeling of accomplishment is huge. You'll be more likely to set another goal and CRUSH that one too!
4. It's easier to not spend when you have a good reason for not spending. (No one can be upset when you turn down invites like this: "Sorry, I think I'm going to skip the movie theater this week- I'm saving up for a trip to Europe!")
5. You'll start spending more consciously- each purchase you make will be contemplated MUCH more closely. "do I really need that new sweater or would I rather put the money into my House Downpayment Fund?"
Now that you know why you should set goals- go out there and SET ONE! Maybe your goal is to build up your emergency fund to $5,000; or to save $1,000 for a new computer; or to put $50 per paycheck into your 401k. Whatever you want to do, make it a goal and start working towards it!
Do you set financial goals? What are your current goals?
My current financial goal is to spend as little as possible while I build up my business. (OH PS guess I should mention that I'm not doing very well at that- Sunday night was my first night on the meal plan and I already failed. We went out for sushi, haha. WHOOPS. #worthit)