Create a Savings Plan
Make a plan to start saving. Your ability to adequately save will determine your financial outlook and dictate your ability to handle financial challenges that may arise over the years. Remember, you can start saving any time. Regardless of your current savings, assess or create a savings plan. This plan will help determine the amount of money you should be saving monthly in order to meet your lifetime goals.
To help walk you through the process, download our Savings Spreadsheet. Then follow the helpful steps listed below:
- Determine your long-term and short-term savings goals.
Do you want to buy a house or take a yearly vacation? When establishing your goals, ask yourself these types of questions. Make a list of everything you want to save for during your lifetime. There are no right and wrong answers, and don’t worry if you forget something. Just simply add it to the list when you remember.
- Estimate the cost of each goal.
Once you have a list of savings goals, estimate how much each goal will cost. This will create a clear picture of how much you will need to save. For small items on your list, determine the full cost. But for larger items (items you will probably need a loan to purchase) such as a car or home, determine the portion you will pay initially for a substantial down payment.
- Identify the date you would like to achieve each goal.
For each goal, determine the date that you would like to achieve the goal. This will help you create a savings timeline. For example, if you want to buy a home in the next year, then you will have 12 months to save. List the number of months you have to save for each item on your list. Remember to be realistic, as it is common to start small and work your way upwards.
- Your goals, the costs, and a timeline will outline a savings target.
Your savings target is the amount of money you need to save in order to achieve your goal in the desired time frame. Once determined, it may seem that some of the savings targets are unrealistic and will never be achievable. But remember, there are many savings options available such as investment opportunities and savings accounts that might allow you to earn more on your savings over time.
- Continuously analyze your savings.
Now that you have established your goals and savings target, compare the results to what you are currently saving. If you are saving less than your savings target, then you might consider increasing your monthly savings. This can be established by trimming other monthly spending and variable expenses.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.