We all have dreams worth saving for! Whether you're putting away money for retirement, a down payment on a home or your kids' college tuition, it's easier to save when you have a road map telling you how to get there.
As you track your budget for 2021, remember to track your savings goals too! This post offers some strategies to help you save for short-term, mid-term and long-term goals. Find out how to determine exactly what you need to save each month to hit your target amount and ways to make it easy.
Saving Strategies to Reach Your Financial Goals
- What are you saving for?
Determine your short-term (possibly an emergency fund), mid-term (like a down payment on a house) and long-term (retirement) goals. TIP: Stock your emergency fund with at least three months' expenses before ramping up on other savings goals!
- Set a timeline.
How much will you save and when will you need it? For example, by 2026, I will save $35,000 for a down payment on a home.
- Build your savings plan.
Calculate a monthly savings amount for each goal. To reach $35,000 in five years, like the prior example, you'll need to save $583 per month.
- Create a budget.
Add the total monthly savings goals to your budget. If it's more than you can afford, consider making a few cuts, adding extra income or choosing a higher-yield savings vehicle.
Got bigger goals? To make sure you're saving in the smartest way possible, consider working with a finance professional. Call us at 781-635-9022 for a trusted referral who can help you organize all of your financial plans.