Create Your Savings Plan
Having a savings plan for you and your family is an important part of living a financially healthy lifestyle. This can sometimes take a lot of thought and energy, but if you don’t plan now, you may end up regretting it later when you need the extra cash most. To help you from getting in a sticky situation, make sure that you are always contributing to your savings account and savings plan.
Here are a few steps to get you on track to meeting all of your savings goals with confidence.
- Assess Your Budget
Before you can make or meet any financial goals, you have to know how much money you’re working with. Your budget may fluctuate monthly, so don’t feel like you have to create a strict long-term budget. As you budget, remember to account for one-off expenses like birthday gifts and special occasions.
- Create an Emergency Fund
Murphy’s law states, “Anything that can go wrong, will go wrong.” As soon as you begin saving towards your goals, something will happen to throw you off track – like a flat tire or an unexpected medical expense. If you have an emergency fund in place, these expenses won’t set you back on larger goals. Before contributing to your other savings accounts, put $1,000 aside. By expecting the unexpected, you will be in position to handle a surprise expense.
- Consider Retirement
A vacation to Hawaii next year sounds great, but is that the best decision long-term? Retirement may seem a long way off, but it will be here before you know it. Don’t prioritize a week-long vacation over retirement.
Before saving toward any miscellaneous items, make sure you’re contributing to a 401k or other retirement savings account. If your employer offers a match, be sure to maximize your money by contributing the match maximum.
- Other Savings Goals
Once you’ve established a retirement savings account, it’s time to decide how to contribute to other long and short-term goals. Create individual accounts for each goal so your money is separated and easier to track. If you have a long-term goal like saving for college or a mortgage, find ways to maximize your money. Many certificates of deposit offer higher interest rates than regular savings accounts. Earn as much as you can by putting your money in accounts with a higher return.
Remember to be flexible in how you save and forgive yourself if you fall a little short of your ambitious goals. Instead of focusing on what you didn’t achieve, celebrate your successes and take steps toward improving a little bit at a time. We’re always here to help. If you need to talk through creating a budget or learn about your savings options, our team would love to answer your questions.
Make your plan and take the America Saves Pledge! It's hard to save, but you can do it!