Why is goal setting such a powerful savings tool?

Saying ‘you should save money’ – is like saying ‘you should get good grades’.

You know you should – but it just isn’t as easy as that. You need motivation and dedication and that’s where goal-based saving can help.

Budgeting |

Instead of starting your savings journey with an unambiguous goal and distant deadline, goal-based saving helps you break it up into smaller, defined, achievable goals! 

There’s a big difference between intention and goals: 

1. ‘I should save more’ vs ‘I should save $2000 more in the next 12 months’
2. I should save $2000 more in the next 12 months is a real goal - defined, time bound, measurable and (for many) achievable.

Here are some reasons why goal setting is such a powerful savings tool: 

1. Clear Direction:
   Having a specific financial goal sets a clear direction for your savings effort. With Savvy, you can easily create a new stack or update an existing one with a goal, such as ‘Holiday to Europe’, or ‘New car’, goal amount and target date.
   
   
2. Motivation:
   Goals help create a sense of purpose and motivation. They give you something to work towards, making it easier to resist impulse spending and stay committed to your savings plan. Savvy’s engaging nudges, prompts and graphics are designed to help keep you focussed and motivated toward achieving your goals.
   
   
3. Measurable Progress:
   If you have a goal, you can track your progress towards it over time. As you save, you can see how far you've come and how far you’ve got to go. This sense of accomplishment can further fuel your determination to save. Savvy makes it super easy to track your progress and see how you are progressing toward success.
   
   
4. Breaking Big Goals into Smaller Steps:
   Saving for large goals can be overwhelming, but goal setting helps you break these into smaller, manageable steps. You can set interim monthly or yearly saving objectives, making the process more achievable. Savvy helps by breaking your overall goal down into manageable average weekly savings amounts so you can see all your smaller successes along the way.
   
   
5. Prioritisation:
   Having clear goals helps you to prioritise your spending and savings. Having a clear goal can help you cut back on unnecessary expenses and focus on what matters most to you.
   
   
6. Long-Term Vision:
   Saving without a goal can lead to short-term thinking. With goals in place, you develop a longer-term view that extends beyond single purchases or actions.
   
   
7. Positive Habits:
   The act of setting and achieving financial goals helps to develop good habits. It encourages discipline, delayed gratification, and responsible financial behaviour. Savvy’s savings tools like Boost, Salary Split and Sweep help you develop these positive habits without even having to think about it. 
   
   
8. Celebrate Success:
   When you achieve a financial goal, no matter how big or small, it's important to celebrate your success. Acknowledging your achievements can improve your confidence and positively reinforces your savings habits. Savvy is with you for the whole journey, including celebrating every success.