Planning is part of our lives. Even without realizing it, we always have a strategy to achieve some goal, be it simple or not.
When it comes to finances, the reasoning is the same! With a little planning, you will be surprised at the result: you will certainly use your money better, reevaluate expenses, and think of ways to save money.
Using your budget to guide you in your spending, you will learn to save, either for unexpected expenses, or even to better plan for your future.
Your dream: extra motivation for your planning
Goals often serve as a motivating factor or a driving force to keep us focused on the task at hand and the dreams to be realized. That is why it is important to set short, medium, and long-term goals for any aspect of your life, be it personal, educational, social, or financial.
Going back to the financial aspect, once you have determined your goals, you should include them in your monthly budget in order to start making them come true. To do this, you need to be disciplined.
But how to define your goals? Realistic goals have five basic characteristics. We can say that they are.
Specific
Smart goals are specific enough to suggest an action. Example: Save enough money to buy a refrigerator, not just save money.
Measurable
You need to know when you have reached your goal or how far away from it you are. Example: the refrigerator you want to buy costs $1500 and you have $800 saved up.
Attainable
Your goals should be reasonable and achievable. Example: I know I can save half of the money I earn every month to reach my goal within a year.
Relevant
The goal needs to be common sense. You don't want to work toward a goal that doesn't fit your needs. Example: You don't need to save money to buy 18 pairs of shoes.
Predictable
Set a definite target date. Example: I plan to buy my refrigerator by the end of this year.
