D: Dedicate dollars to your goals
Financial goals range in size and timeframe. While it may feel necessary to choose which goals to prioritize, the appropriate course of action is to save money for each financial goal on a regular basis, regardless of the dollar amount.
Consistency is key
Regularly saving eliminates the need for constant decision-making. You remove the thought process, energy and stress that comes with ongoing evaluations and replace it with automatic action. As a result, you create a behavior habit, which enables ongoing progress and continued commitment to goals.
Saving habitually also takes advantage of time, a valuable and often overlooked resource. Over time, money grows over a longer time horizon and builds on itself (a financial concept called “compounding”). Furthermore, invested dollars can take advantage of market fluctuations – meaning the same dollar amount buys more shares when prices temporarily decline.
Habits versus decisions
A 2006 Duke University research study found that 40% of actions people perform each day are habits, not actual decisions.
The Power of Habit by Charles Duhigg
Do not fixate on dollars
Preconceived notions about the “right amount” of savings can be discouraging. Rather than allowing personal biases and inaccurate assumptions to dictate your behavior, set realistic expectations for savings. Reflect candidly and figure out the appropriate dollar amount that fits with your lifestyle. Remember – the true “right amount” is anything above zero. Any savings are positive and worthy of celebration.
Top stressor
In a recent study by Bank of America, not saving enough was the number one financial stressor
for millennials (defined as age 24-41 in this report).
Give yourself a raise
Every year review savings and increase the dollar amount. Regardless if the step up is small or large, it boosts progress. Revisiting and reaffirming goals on a regularly basis deepens commitment and prioritization. Demonstrating discipline and intent is energizing and key for success.
