People don’t plan to fail, they fail to plan. There are several tips you can use with regards to setting up and reaching your savings goals when you are simply adding money into the bank.
Here are five steps to consider if you want to save money for a specific purpose or simply to have savings set aside for the future.
Choose a specific savings goal
In order to achieve something, you need to decide what you want to accomplish, whether it’s a vacation, a college education for your children, a down payment on a house or retirement.
Set a savings deadline
The next step is to set a timeline to achieve your goal. Some goals, such as paying off a credit card next year, might require a shorter time frame, while others, such as buying a car, may require a longer one.
For each goal, create a separate account
Each savings goal should be assigned to an account, whether you’re saving for a car, house, vacation, or anything else. That way, you can determine how you’ll divide your resources among the accounts based on your timeline and amount needed.
Track your goals
Make sure you keep track of your progress so that you can see where you stand and celebrate your successes. If you are able to see your progress, you’ll be much more likely to be motivated to continue.
Having reached your goal can encourage you to keep working toward your other goals, and to set new ones.
Get it automated
Instead of remembering to set aside money for a goal, set up automatic transfers and deductions.
In order to avoid forgetting to move money from one checking account to another, you can establish automatic transfers to occur on the same day each week or month, putting you in a position to not have to remember to remember to make the move and take a separate action.