We’re happy to share the following guest blog post from BALANCE Financial Fitness.
What’s your savings goal?
Some people want to stash cash for a home, while others need to save for their kids’ college. Not sure yet? There’s no time like the present to figure out long-term financial priorities for you and your family.
No matter your goal, achieving it is easier when you follow these specific guidelines. Check it out:
- Set a timeline
Timelines help put your goals into focus. For short-term goals like a vacation, you may be able to set an exact date by which you plan to save. A long-term goal such as retirement, however, may be a little more open-ended and require benchmarks along the way. So if you set a number for your retirement target, measure your progress through the years by hitting planned dollar amounts.
- Find ways to cut monthly expenses
Savings may require some sacrifices. If you want to save more in a shorter amount of time, take a look at your spending habits. Can you eat out less? Wait to upgrade your smartphone until it’s necessary? If your goal dollar-amount is high, you might want to consider bigger actions, such as moving to a more affordable area.
- Use a savings tool
For many long-term savings goals, investments and special accounts will help you earn more money. Typically, experts recommend mutual funds for goals over five years. For shorter-term goals, your financial institution may offer a money market account with high rate of return.
- Don’t give up
As with any other type of goal, you may experience setbacks along the way, such as a sudden change to your financial situation. Try not to get too discouraged. Adjust your finances to meet your immediate needs, but don’t forget your end game.
- Reward yourself along the way
Maintaining your money motivation can be difficult, especially over a long period of time. That’s why it’s important to treat yourself along your savings journey. If you hit a benchmark (e.g., six months of consistent savings or a specific dollar amount), do something nice for yourself. Just try not to blow your budget on a big celebration; that kind of defeats the purpose.