What are the advantages of having distinct savings targets?

Question

In what way does one’s set savings targets help approach getting one’s finances in order?

Answer 1

Working towards a specific amount such as, for example, a retirement savings plan, can make the task of putting money away much more engaging than it otherwise would have been. It turns into a fun game where you would prefer to reach your goal, be it a house, car or retirement, rather than spend money elsewhere. Having clear objectives allows one to give meaning to their savings, making it bearable to control the tendency to make frivolous expenditure.

Comments

Curious if you have any suggestions for those who are in the U.S. and on disability that leaves them on assistance but not allowed to have savings?  For years I've just kept my occasional leftover money in a jar at home.  Even if I was able to have a savings account the bank charges far more each month than I would ever get in interest.

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I’ve been keeping a tally of every single expense I make, in a dollar store notebook.
I list a page for each credit card I have, a page for my checking account, and one for cash payments.
I total as I go; it helps me maintain control and be aware of how much I’m spending.

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Thank you for a thoughtful and rich content.    I am a saver but unmotivated.   I'm going to try your suggestion and set goals for my savings.

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Not having a savings goal is what is stalling my hubby and I. The FFEF is what I am struggling with. I know we want to have 3-6 months living cost in an account. However, not having that money saved for something specific makes it harder, at least for me.

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One thing you haven't mentioned yet is to stop giving gifts. The amount of money some parents give to their grown children or grandchildren is amazing. I'd rather save my money for a comfortable retirement house when I'm old. Anyway, they have more stuff than I do;-)

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I save $45,000 (after taxes) every year by living frugally, wise shopping, being a minimalist, having NO debt,
buying in bulk and more - and I only make $90,000 yearly....