Are you looking to save for something special? Then you should make a plan. People who set a money saving goal tend to save a lot faster than those who don’t. Here are 6 steps to help you make your savings goal a reality.
1. Choose Your Goal
Naming a goal will help make it real and will give you an incentive to reach it faster. Your first step should be to ask yourself what you want to save for. Start small with a short-term objective, like buying a new car or taking a vacation. Once you achieve some smaller goals, you can aim higher and make long-term missions, like purchasing a new house.
2. Take a Look at Your Finances
In order to realize any goal you need to find out if it’s possible. Calculate your monthly income from your paycheck, benefits, side hustles or any other money coming in. Next, track all your expenses for the month so you know where your money is going and how much you can set aside for your goal each month. You can simply jot down expenses on paper or use an app to keep track electronically.
3. Build a Budget
Making a plan for your money will show you exactly how much money you have and where it’s going. It will also help you figure out the areas where you can save additional money to achieve your goal quicker. There’s no need for a complex budget, just create a straightforward one to plan your monthly spending and proactively track your progress. Try using Excel to create a simple spreadsheet.
4. Choose a Deadline for Your Goal
To ensure you achieve your goal in a reasonable amount of time, set a deadline. One way to make sure you stay on track and hit the deadline is to automate your savings process. Set up your bank account to instantly transfer a certain amount of your funds to it each month. You may also want to consider opening a separate account just for your goals to keep them independent from your other finances. This will help prevent you from spending the money until your goal is met.
5. Keep Your Hands Off Your Emergency Fund
If you have a habit of dipping into your emergency funds to achieve a goal, try making the money less accessible by creating a separate savings account or even saving your emergency cash at a different bank. Remember that you should always prioritize your emergency fund before your other goals, so you have a cushion if something unforeseen occurs. If you experience a major setback, like losing your job, you don’t want to find your emergency fund depleted.
6. Follow Up On Your Goal
Make sure you remind yourself to track your progress and stay on top of your savings. Try adding an assessment date to your calendar once a month for you and your significant other to review your finances. Look over your income, expenses and savings, and make any adjustments based on changes that may have occurred in the last 30 days. Setting a goal is not a “set it and forget it” situation. Stay on top of it!