Reach your savings goals in 2013
Posted on January 27, 2013 by admin
Maybe your goal this year is to put some more money in savings. Good idea!
Here is some ways to help you on this great goal
Set savings goals. For short-term goals, this is easy. If you want to buy a video game, find out how much it costs; if you want to buy a house, determine how much of a down payment you’ll need. For long-term goals, such as retirement, you’ll need to do a lot more planning (figuring out how much money you’ll need to live comfortably for 20 or 30 years after you stop working), and you’ll also need to figure out how investments will help you achieve your goals. Some people have savings accounts for vacation, Christmas, etc. Good first goal is save up one year living expenses for emergencies.
Establish a time-frame. For example: “I want to be able to buy a house two years from today.” Set a particular date for accomplishing shorter-term goals, and make sure the goal is attainable within that time period. If it’s not attainable, you’ll just get discouraged. If you get discouraged still put in alittle something no matter how small.
Figure out how much you’ll have to save per week, per month, or per paycheck to attain each of your savings goals. Take each thing you want to save for and figure out how much you need to start saving now. For most savings goals, it’s best to save the same amount each period.
Keep a record of your expenses. What you save falls between two activities and their difference: how much you make and how much you spend. Since you have more control over how much you spend, it’s wise to take a critical look at your expenses. Write down everything you spend your money on for a couple weeks or a month. Be as detailed as possible, and try not to leave out small purchases. Assign each purchase or expenditure a category such as: Rent, Car insurance, Car payments, Phone Bill, Cable Bill, Utilities, Gas, Food, Entertainment, etc.
Trim your expenses. Take a good, hard look at your spending records after a month or two have passed. You’ll probably be surprised when you look back at your record of expenses: $30 on ice cream, $10 on parking tickets? You’ll likely see some obvious cuts you can make. Depending on how much you need to save, however, you may need to make some difficult decisions. Think about your priorities, and make cuts you can live with. Calculate how much those cuts will save you per year, and you’ll be much more motivated to pinch pennies.
Reassess your savings goals. Subtract your expenses (the ones you can’t live without) from your take-home income (i.e. after taxes have been taken out). What is the difference? And does it match up with your savings goals? Let’s say you’ve decided you can definitely get by on $150 per month, and your paychecks amount to $230 per month. That leaves you with $80 to save.
Make a budget. Once you’ve managed to balance your earnings with your savings goals and spending, write down a budget so you’ll know each month or each paycheck how much you can spend on any given thing or category of things.
Stop using credit cards. Pay for everything with cash or money orders. Don’t even use checks. It’s easier to overspend when you’re pulling from a bank or credit account because you don’t know exactly how much is in there. If you have cash, you can see your supply running low.
Open an interest-bearing savings account. It’s a lot easier to keep track of your savings if you have them separate from your spending money. We know right now not really any banks are offering a decent interest rate on savings accounts, though better than nothing. Who knows in the future the banks may give better interest rates on savings accounts..if they are smart they will:)
Pay yourself first. Savings should be your priority, so don’t just say that you’ll save whatever is left over at the end of the month. Deposit savings into an account (or your piggy-bank) as soon as you get paid.
Don’t get discouraged and don’t give up. You may not think you can become wealthy but to become a millionaire is possible if you set up a aggressive savings plan and stick to it.
If you can even follow the basics of these steps or use them as a guideline for you then are off to a great start of reaching your goals and you will succeed!
Leave a Reply