A few weeks ago I wrote a post about taking control of your finances. If you've been having a go at some of those techniques but you're still struggling with money, this week's post might be for you - we're thinking about why you're not reaching your financial goals.
As a general rule, I think that setting goals is a good thing. It helps to focus your mind on what you're working towards, and it gives you a clear idea of whether or not you're achieving what you want to achieve. However, if you're struggling to get to where you want to be, it can sometimes be hard to work out why. In this post, we're going to think about why you might not be reaching the financial goals you've set yourself, although some of these points would relate to just about any goals that you set. As always, if you're struggling with debt, Step Change are the people for you rather than this blog.
Your goals are too ambitious
Now, I love an ambitious goal as much as the next person, but the fact remains that if your goal is (for example) to save £10,000 by the end of the year and you earn £11,000, you're going to struggle. Making sure your goal is achievable is the best way to ensure that you can stick to it. Rather than making the goal a savings goal, it might be better to focus on increasing the amount you earn in the short-term, and then looking at how much you can save from there.
I know that "skip the Starbucks, save the money instead" is an overplayed cliché at this point, but for some people it's a genuine and valid starting point. Saving what might amount to a fiver a week is not to be sniffed at if you're new to saving money, and is more realistic (and probably more achievable) than going from nothing to saving thousands. And speaking of going from zero to sixty...
You're making yourself miserable
Unless there's a REALLY good reason or it's a temporary situation, cutting back in an extreme fashion is likely to make you miserable. When you feel miserable, it's going to be harder to resist the "treat yourself" impulse, meaning you end up spending the money you were trying to save and - oops! Now you're even more miserable! It's a vicious cycle. See also: working every hour of the day to increase your income, only to blow a day's salary on the one day you allow yourself some time off.
If this sounds familiar, take a step back. If saving a good amount in a short time span is truly necessary, then you're likely to be more motivated to achieve it. But if there's no end point, you'll burn out before you get halfway through. There is absolutely no point making yourself miserable in pursuit of your goals - your goals are meant to inspire you, not make you feel worse!
To try to avoid burning out, use smaller targets to stay on track or completely re-evaluate your goal. It's better to do what you can than undo your hard work by chasing something unsustainable. Try taking a small percentage (5-10%) of what you do save each week to spend on something that will make you happier - nothing too short-term, like chocolate, as it won't last and you'll want more. Think about getting more psychological benefit from those activities, like a cinema ticket to spend time with your friends rather than a DVD you would watch alone.
You've taken on too much
It's possible to save for a house deposit and a huge party for your partner's 30th birthday and a holiday to Mexico, but it's hard. It's even harder when you don't have much money, and you're fairly new to saving and meeting financial goals. You can split your savings into different "pots," which is actually a pretty effective way of saving for multiple things, but at the end of the day you're still only going to have £100 split three ways. Always make sure that you prioritise the things that are happening sooner (like that party) whilst taking a balanced approach to the long-term (like that house deposit). YOLO will only get you so far, but so will living off beans on toast and wearing your jeans until they have embarrassing holes in - both things I've done, neither of which I recommend!
If you're feeling overwhelmed financially, it's always good to return to basics. If you could only achieve one goal on your list, which one would it be? Can you prioritise things differently? What would the cost (emotional, physical, and financial) be of putting some of your other goals on the back-burner for a little while, until you feel more confident that you can commit to them? If these aren't things you can decide on your own, try asking your partner or your friends for their advice - what would they do in your situation? This also involves talking about money with them, which is something I'm very on board with - we should all be more honest about our financial health.
You're not really that motivated
As with any goal, it's always good to ask yourself why you're doing it. If you're doing it for someone else, or for social approval, or because you think it will make everything magically better, then it's likely that you are either going to be disappointed when you achieve it, or less motivated to actually do it. And if you're not really that motivated, it's not something you should be focusing on!
Whilst basic things like shelter, food and clothing are things that we all need to budget for (and therefore aren't that exciting), if you're having difficulty being motivated to even do that then there might be something else going on. Depression can be insidious and strike when you least expect it, so it's often good to talk things over with someone neutral who can advise you as to the best way forwards.
If you're still struggling to understand why you're not meeting your financial goals after reading this post, either let me know in the comments or drop me an email, I'm happy to discuss it with you.
Dr Sarah Blackshaw: Clinical Psychologist, blogger, tea drinker, interested in dinosaurs and shiny objects