How-to Guide: Set and Reach Your Savings Account Goals

3 min read

Should you save, spend or do both? Although nobody promises tomorrow, it’s crucial that you save some money, even a little. Without savings, how will you meet any future unplanned expenses, i.e. a friend’s wedding, any big purchases such as a home renovation or a vacation? Where will you get money after retirement?

According to research, over 33% of people living in North America don’t pay all their bill on time although about 59% of them have savings accounts. Moreover, it’s worth noting that the research indicated that 39% of Americans always carry their credit cards with them. Therefore, saving money to reach a specific goal is very important.

Below are ways that can help you in setting financial savings goals for major financial events:

Track Your Spending History

On average, how much do you spend in a year? Estimating your future spending based on history will help you foreshadow the costs that you may incur during high spending events, e.g., the holiday season. However, if you doubt or you are uncertain about the amount of money you usually spend in a given period, check the history of your credit card statements.

Tracking your spending history will greatly help you understand how you can manage your money and even take total control of your finances. At first, it may look like a lot of work, but it will help you get some ideas on how you can save.

How Much Do You Need to Save?

Event budgeting can help you reduce your daily or monthly spending significantly. This may sound boring, but it will focus your attention on your ultimate financial saving goal. You only need to figure out your monthly savings goals.

To aid this, create a savings account separately and allocate all your monthly savings into the account. Creating a separate account will ensure everything is kept in check while your financial state keeps growing due to bank interest.

Automate Your Savings

Most people get paid by deposit. This makes it easy to direct your earnings into various accounts. Automating your bank account so that some amount goes straight to your savings account will increase your overall saving while you cut on spending.

This is because having a separate saving account will reduce your chances of accidentally spending the money. You will definitely have a lot of money at the end of the saving period.

Limit Monthly Bills

To limit your monthly bills, you need to decide on the amount of money you want to spend at the beginning of every month. This includes your student loan repayment, rent, and utilities. Avoid things that will cut your ability to save, i.e., buying a car on loan. This is because it will reduce your normal daily spending besides your savings.

Know Your Savings Options

Whenever saving and spending aren’t an option for you, your financial choices will be to purchase on credit cards or go for personal loans. Personal loans come with high-interest rates since they don’t need security and most lenders will not allow partial payments. It’s crucial to note that credit cards are a form of borrowing which you must pay later.

Thus, it’s essential to understand yourself and know which options to take in the process of increasing your savings.

Learn to Say NO To Spending

The more precise you are about what may want, the easier it will be in making good choices. If there is an activity that may lead to more spending, which you don’t like, learn to say o.’ For instance, if your friends spend a lot on night outs and clubbing and you don’t like it, learn to decline their invitation.

Start Saving Today

Why wait for a rainy day?

There is no need for you to have a major event in order to start saving. Just forecast on any significant spending that may occur in future months or years and start putting away some money. With time, you will have something to smile about.