top partner

for CFD

Image source: Getty Images

If you were to ask Suze Orman what her career-related priorities are right now, she’d probably tell you that encouraging workers to build an emergency fund is at the top of her list. Orman co-founded SecureSave, a company that partners with workplaces to make emergency savings accounts accessible to employees, because she recognizes that it’s so important for people to have some cash reserves in the bank.

Without money in savings, you could instantly land in debt when unplanned expenses arise. And that debt could wreck your credit and cost you a lot of money in interest — money you’d probably rather spend on other things.

But while Orman is a firm believer in having emergency savings, she’s not so big on savings goals. Here’s why.

When you set yourself up to fail

Many people set savings goals for themselves only to fall short. And that’s understandable.

You might, for example, decide that you really want to save $1,000 one year. But if your car needs a major repair midway through, or you encounter a medical issue that has you spending a lot of money on healthcare, that may not happen.

If, come July, you realize your $1,000 savings target isn’t attainable, you might get discouraged and stop saving completely. And that’s why Orman doesn’t like the idea of savings or other financial goals.

The way she sees it, when people set these goals, they put themselves in a position where they might end up disappointed and discouraged. That could constitute a major setback. So instead, Orman suggests a “do the best you can” approach to saving money.

Rather than sell yourself on a specific dollar amount you want your savings to hit, Orman says, “Just save something and see how it goes.”

You might start off growing your savings account from $0 to $150. And $150 is far better than $0. So even though it’s not a ton of money, it’s a great start.

Orman also insists that as people can see their cash balances grow, they tend to become “addicted” to saving money. But that’s a good thing, because it pushes them to keep at it.

It’s a matter of your mental health

Some people need to have specific goals to feel motivated to start saving. If you’re one of those people and you absolutely need those goals, you don’t have to fight it. But if setting goals and falling short has tripped you up in the past, then you may want to instead take Orman’s approach and just do the best you can, whether it’s in the context of building an emergency fund, socking money away to buy a home, or funding your IRA.

Financial goals can be motivating in their own right. But they can also wreak havoc on your mental health when they don’t work out. So if you’re willing to give Orman’s approach a try, you may find that it takes the pressure off but keeps you going at the same time.

Alert: highest cash back card we’ve seen now has 0% intro APR until nearly 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

Read the full story: Read More“>

Blog powered by G6

Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.

For any inquiries, please contact [email protected]