When you are saving for a major goal, you must start as soon as you can. It doesn’t matter if you can only set aside a small portion, if you can save and invest wisely, you will hit your goal in no time. The more you can add, the faster you will reach your goal as your savings or investments compound over time.
As time passes, it’s smart to monitor your progress with periodic check-ins. It’s always good to know your progress since you need to see if you are on track or are falling short of your goals. My favorite way to hold yourself accountable is to start a personal diary. In this diary, you can write down the goals you would like to achieve and your daily progress. This is a good way to hold yourself accountable to your plan.
Falling Short
You check-in and you noticed that you’re falling behind on your goals. When you notice you are off track, there is no need to stress about as long as you have time. For small goals, you should have at least five years and longer for bigger goals such as retirement. Due to these check-ins, you can easily adjust your habits.
If time is not on your side, then you can use these four techniques to get you back on target.
Increase your time horizon by giving yourself more time
Look at current goals you or expenses you have planned over the next few years and see what you can postpone. Let’s say you have a major vacation coming up, maybe you can downsize this vacation to a cheaper place. This decision will allow you to accumulate money over the near term.
Decrease the size of your goal.
Maybe you check in a little too late on your goal and it will be hard to meet it. A good example would be saving for a house. While you may not get your dream house, you could find a smaller, more affordable house that will make you happy.
Increase your investments or savings.
Even though this may seem like the hard option, you can set aside extra money so you can achieve your goal. Additionally, you can look at increasing your exposure to stocks. Be careful of increasing your exposure to stocks. Even though this will increase your potential upside, this also increases your potential downside risk. I would only recommend this strategy if you have a long time horizon to weather the volatility with stocks. Lastly, if you increase your exposure to stocks, you need to be comfortable with seeing sharp losses without selling it.
Don’t look at these strategies and pick one. When monitoring your progress to your goals, look, and see if you can do a combination of them. You could find out that one option or a combination of the strategies will better suit your needs. Getting back on track depends on your situation.