You’d think a short-term financial plan—saving for a vacation, for example, or stashing an extra month’s pay into your emergency fund—wouldn’t be hard to do. After all, you only have to tighten your belt for a limited period of time. Plus, the results come faster, and that motivates you to stay the course.
But small money goals have a weird way of ending up as fails because even financially savvy people don’t give enough thought and attention to creating a workable plan.
Are you guilty of this?
To help figure that out, read this rundown of common pitfalls that may be sabotaging your efforts.
1. You Don’t Set a Realistic Time Frame
Expecting to reach your goal in too-tight a period of time is a common stumbling block. It’s the same reason crash dieting never works: You think you can handle the drastic sacrifices for a few weeks or months, but the terms are too harsh, and your efforts falter.
Natalie Taylor, CFP®, a financial planner with LearnVest Planning Services, agrees. People tend to fall short of their resolutions when the time frame in which they want to achieve their goal just isn’t possible given their current resources, she says. Not only does it set you up for failure, it “makes it harder to feel motivated over time.”
So level with yourself as to how long it should take you to reach your goal, given your lifestyle and money situation. Let’s say you’re hoping to save $500 for a weekend trip. It’s beneficial to give yourself several weeks’ time to adjust to the financial trade-offs or find a surplus cash flow rather than overextend yourself to meet an objective that’s simply not compatible with your current situation.
2. You Forget to Write Out a Solid Plan
While people are more likely to map out concrete steps to reach longer-term money objectives like saving for retirement or buying a home, “another major pitfall I see is having a goal but not creating a plan to achieve it,” Taylor says.
Creating a plan gives you focus; it also helps clearly define how you’ll be able to meet your objective as well as understand how it fits into your everyday life. Ask yourself: “How much would you need to put toward the goal each month? Does that amount fit within a reasonable budget for you? Can you bring in some extra money from a side gig to make more progress?” suggests Taylor.
And don’t just think it through; write it out. If you’re hoping to save for a new laptop, for instance, write out not only how much money you’ll be saving each month but also what you can sacrifice to make that happen. “The act of writing down a goal is an action; the moment that you go from an idea to an action, you are more likely to take additional actions in the service of your goals,” says clinical psychologist Ben Michaelis, PhD.
3. You Don’t Track Your Progress
To stay the course and complete your goal, it’s important to not only keep yourself accountable but remind yourself of the headway you’ve made. Acknowledging and celebrating milestones—hitting the halfway point, for example, and then the three-quarters mark—gives you the mojo boost to keep going.
To do this, break down your overall goal into weekly or daily objectives, then frequently check in and see how you’re doing, says clinical therapist and life coach Cara Maksimow, LCSW, CPC.
“Set up what you would like to accomplish each week and start the day off with a reminder of exactly what you want to accomplish, what you have done so far and what your next steps are for today,” advises Maksimow. Consider creating a spreadsheet or chart that provides a quick visual snapshot of the strides you’ve made and use it to cheer yourself on and see that the end is in sight.