While wanting to save more money has likely crossed your mind, identifying specific savings goals will help you reach them, faster. Whether you’re saving towards one or working towards multiple goals at once, creating an effective plan to save will help get you there.
Follow these steps to get started today!
1. Choose a Specific Reason to Save
Everyone has a different savings goal and it’s important to identify yours. Determine what you’re saving for – a vacation? Down-payment for a home? Whatever it may be, put it down on paper along with the “why” you’re saving for that goal. Create a “why” statement that resonates with you and motivates you to stay on track. Then, establish the amount you want to save so you know exactly what you’re working towards.
2. Create a Timeline for Your Goal
After you’ve decided what you’re saving for and why, set a timeline of when you’d like to reach your goal. Some timelines may be clearly defined, such as saving for next year’s vacation. Others may be more complex with a benchmark; for example, you may decide you want to have $75,000 in your retirement account before you reach the age 35.
3. Set Monthly Goals to Meet Your Timeline
To reach your goal within your timeline, it’s time to crunch the numbers. Setting a goal to save $10,000 in three years may seem overwhelming, but when you break it down to a monthly goal of $277.78 saved, it may be less intimidating. You want your goal to be manageable, so you feel as though it’s attainable.
4. Use the Right Tools
Reaching your savings goals involves using the right tools to help you along the way. Take advantage of financial aggregators that allow you to view all your accounts in one place, set goals, and easily track your progress along the way.
Finding the right high-return account will help you reach your goal faster. Share Certificates offer a higher return with the ability to add more to the account when it reaches maturity before renewing. If you’re looking for an account you can continually access and add funds to, explore money market or money market checking accounts where you can earn a higher return. No matter the account you choose to store your funds, having it in a separate account from your primary cash will help reduce the likelihood of tapping into it for other purposes.
An easy way to contribute to your savings goals is to automate the process. Automatically transferring funds, setting up a direct deposit, or setting up a payroll deduction to your savings account means you’ll be taking steps toward reaching your goal without doing any work.
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It’s one thing to set a goal, it’s another to achieve it. Set a reminder in your calendar to check in on your goal monthly. Set aside some time to see if you’re meeting your monthly goals. If you aren’t making the progress you expected or hoped for, don’t get discouraged – use the opportunity to adjust accordingly. If you need motivation, review your goals and “why” you want to reach them. Reward yourself as you reach some basic milestones along the way to help keep you motivated. A few small splurges along the way will help you stay motivated for bigger goals. The best time to start saving is now - reaching your savings goals takes work and dedication. Following these steps will help you stay on track to reach your goals.