Features & Sacco Leadership

Why you should review saving goals every month

how to save money for kids: How much you can save from your salary: Benefits of the 50/30/20 Rule in Saving: Why you should review saving goals every month: The importance of informal saving

Regularly reviewing your saving goals is a critical habit for effective financial management. By taking a closer look at your financial progress each month, you can make informed adjustments, stay motivated, and ensure you’re on track to meet your long-term objectives.

  1. Tracking Progress

Monthly reviews allow you to track your progress toward your savings goals. By examining your account balances and comparing them to your targets, you can see whether you’re saving as planned or need to adjust your strategy.

If your goal is to save Ksh 120,000 for an emergency fund within a year, a monthly review will tell you if you’re hitting your Ksh 10,000 per month target. If you’re consistently saving less, you can take corrective actions sooner rather than later.

  1. Adjusting for Changes in Income and Expenses

Life is unpredictable, and your financial situation can change due to a raise, a job loss, unexpected expenses, or new financial responsibilities. Monthly reviews help you adjust your savings plan to reflect these changes.

Suppose you receive a raise at work that increases your monthly income by Ksh 10,000. During your monthly review, you can decide to allocate an additional Ksh 6,000 towards your savings goal and use the remaining Ksh 4,000 for other needs, thus accelerating your progress.

  1. Identifying Unnecessary Expenditures

Regularly reviewing your finances helps identify areas where you may be overspending. By scrutinizing your expenses, you can find opportunities to cut back and redirect those funds into your savings.

During a review, you notice that you’ve spent Ksh 8,000 on dining out, far more than your Ksh 4,000 budget. By identifying this trend, you can set a goal to reduce this expense in the following month and increase your savings by the difference.

  1. Staying Motivated and Focused

Seeing tangible progress can be a significant motivator. Monthly reviews provide positive reinforcement and keep your savings goals top of mind, preventing them from slipping into the background.

If your goal is to save for a vacation costing Ksh 500,000 and you see your savings account grow from Ksh 50,000 to Ksh 75,000 in one month, this progress can motivate you to keep going. It’s a reminder that your efforts are paying off.

  1. Reassessing and Realigning Goals

Your priorities and financial goals can evolve. Monthly reviews allow you to reassess and realign your goals with your current needs and aspirations.

Example: Initially, you may have set a goal to save for a new car. However, after a few months, you might decide that investing in further education or a home down payment is more important. Regular reviews allow you to redirect your savings accordingly.

  1. Preparing for Emergencies

Monthly reviews ensure that your emergency fund is growing steadily and is adequately funded to cover unexpected expenses, reducing the financial stress of unforeseen circumstances.

You aim to build an emergency fund of six months’ worth of living expenses. Monthly reviews help you stay committed to setting aside a portion of your income, ensuring that the fund is there when you need it most.

  1. Taking Advantage of Opportunities

Regular reviews help you stay informed about your financial health, allowing you to seize investment opportunities or make informed financial decisions quickly.

If you notice an extra Ksh 5,000 in savings due to lower-than-expected expenses, you might decide to invest it in a high-yield savings account or stocks, potentially increasing your returns.

  1. Avoiding Overspending During Holidays and Special Occasions

By reviewing your goals monthly, you can plan for holidays, birthdays, or other special occasions without derailing your savings efforts.

With the holiday season approaching, a review in November might prompt you to start setting aside an extra Ksh 10,000 each month for gifts, ensuring you don’t dip into your savings to cover these costs.

 

Andrew Walyaula
Author: Andrew Walyaula

Andrew Walyaula is a seasoned multimedia journalist. waliaulaandrew0@gmail.com

Andrew Walyaula

About Author

Andrew Walyaula is a seasoned multimedia journalist. waliaulaandrew0@gmail.com

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