Whether you’re hoping to save up for a car, a home or simply an emergency fund, creating savings goals will help you save money faster. Don’t let the thought of saving significant funds discourage you. But if it does, you’re not alone. 30% of Americans are say they are constantly stressed out about money. On the other hand, a whole 85% say that they are only sometimes stressed about money.
This is why it’s important to put in hard work now so that you can be prepared for any situation. You can rest easy as long as there’s a nice cushion of funds in your savings account. Follow these easy steps to help you start reaching your savings goals.
- Set a specific goal that you can reach – but make sure it isn’t too easy.
- Figure out exactly how long it will take to reach that goal and write down the specifics.
- Set your plan into motion.
- Make your money work for you with a good interest rate using an online savings account.
- Check on your progress periodically.
- Reward yourself.
Step One: Set a Goal
The first step is the most important– set a specific goal. Start by thinking about where you want to be financially within the next few years and what you want to save up for. Do you want to save for a new car or do you simply want an emergency fund?
Once you have all the details sorted out, write your goal with your deadline on paper and put it in a place where you’ll see it often. Every time you walk by it, it’ll serve as a reminder for your financial goals.
Step Two: Make a Plan
The size of your goal will determine how long it’s going to take to reach it. Divide the total amount of your goal by the amount you can set aside out of each paycheck. The outcome should tell you how many checks it’ll take before you accomplish it. Write down the numbers. If it’ll motivate you, make a calendar with encouraging notes and countdown the amount of time left.
To make things easier, you could set up an automatic deduction out of each paycheck that’s deposited into your savings account. This will help you save even more money because pre-tax deductions are taken out before federal and state tax, so you’ll have less taxable wages.
Step Three: Put it Into Action
Gather all of your bills and credit card statements and carefully look at your account balance. If you have a lot of smaller subscriptions that you’re not using regularly, try unsubscribing from them. That’s money that could be put towards your savings. There are other ways you can save small amounts of money every day:
- Shop at a grocery store that has lower prices.
- Pack your lunch to bring to work instead of buying it every day.
- Carpool with a coworker to save you money on gas and oil expenses.
- If you have to pay a toll on your way to work, consider taking the longer route.
- Download a couponing app on your phone and use it.
Step Four: Make Your Money Work
Make your money work for you. Use a high-interest paying, online savings account. Online savings accounts offer a much better ROI (Return on Investment) than brick-and-mortar banks. Since they have much less operational costs, they can give much more savings to their customers. This means fewer fees asked from you as well. Interest rates can be as much as 20 times what traditional banks offer.
Step Five: Regularly Check Your Progress
Pick a date on your calendar. On that day, sit down to look at all of the bills from that month as well as your budget. Look at the numbers. How much did you save this month? How much did you spend? How do these numbers differ from the previous month? Did you invest any of the money?
If your savings fell short that month, make a plan to meet your quota next month. Make sure you’re not wasting money by buying too many unessential things. Do this every month, or even every week. Set aside enough time to thoroughly look at your spending for that month.
Are you struggling to increase your savings every month? It might be time to seek out a professional financial advisor.
What Does a Financial Advisor Do to Help?
A financial advisor becomes your planning partner. They can educate you on financial topics and ways to save that you might be unfamiliar with. During your first appointment, they’ll look at your financial health and have you fill out a detailed questionnaire. The questionnaire will ask about the following information:
- Income and all sources of income
- All current and expected investments or pensions
Once they fully understand your financial situation, they can enlighten you on any important information that you may have overlooked and how to fix it.
Step Six: Treat Yourself
The last step is to reward yourself. Don’t reward yourself by excessively spending money at the store every month that you save. Instead, take yourself out to eat at a restaurant every once in a while. You’ll be tired of all those packed lunches anyways.