Setting Milestones
I was up early this morning thinking about savings. We had an incident this past week that made me very grateful that I had a rainy day fund. This triggered my thinking about saving for emergency fund, rainy day fund and my children’s education. I don’t know if anyone has gone through what I went through when thinking about this, but I was overwhelmed. I am going to put out some rough numbers just to illustrate my point.
This breaks down how much time I will need to save for a $2,000 rainy day fund and a 6 month emergency fund. This time includes already having $10,000 in liquid savings and contributing $200 per month to savings. It would take 50 months to complete this.
As I thought about it this morning, I remembered what it felt like when I did this the first time for my specific needs. I was totally overwhelmed. I thought about how milestones really helped me out. Putting finances aside, I am currently using milestones to help me train for a triathlon. I swam and played water polo in college. When I stopped swimming competitively I swan the mile in 18 minutes. I started training two months ago for a triathlon and had been physically inactive for many years prior. I currently swim the mile in 30 minutes, but I want to get down to 23 minutes. The only way I can do that is by setting milestones. I set a goal of taking so much time off it each week. I know that in order to do that I have to be disciplined. These are little goals that help me moving towards my goal. They give me a sense of accomplishment that I am partially to my goal. I believe that a person must set high and lofty goals. I believe you can never accomplish those unless you break it down in bite size goals and set out to accomplishing them. Before you know it you will be at the goal.
This is the same way with savings. You need to be disciplined. You can’t get overwhelmed with the task before you. Set milestone goals. With the example above the rainy day fund has been completed along with 2 months of the 6 months for the emergency fund. I would set 4 or 8 milestones. It would either be a month or a half month. Set a reward for being committed to your milestone and achieving it. You need to celebrate the wins you have. This keeps you positive and I believe you will have a happier life.
Set your goals, break them down into milestones, be disciplined and enjoy your time.
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