Saving money is easier said than done for many people.
Setting goals, focusing on what’s important to you, and creating a plan are essential components that will lead to you achieving your saving goals.
Whether it’s saving for a new car, a vacation, new home, or retirement, these money management tips can help you reach your goals.
With a bit of personal money management, it could be possible for you to accomplish your goals sooner than expected.
1. Determine Your Saving Goals
Start with asking yourself what you need to save for.
Is the goal short-term, like taking a trip or purchasing a new device?
Or is your goal long-term, like purchasing a home or retiring? Perhaps the goal is somewhere in the middle, like paying off your student loans.
When determining your money saving goals, it’s important to factor in needs like emergency funds, monthly bills, and necessities.
Skipping this step could lead to a major setback, especially if something unexpected happens. Emergency funds should be prioritized over other funds, but you shouldn’t lose sight of your goals.
Prioritizing your goals can help you create a plan that works for you.
2. Assess Your Finances
After determining your goal(s), it’s time to put your finances under a magnifying glass.
Although some of us try to avoid examining our finances, or even discussing them for that matter, it must be done.
Take the time to calculate your monthly income based on your paycheck, Social Security benefit, or other form of income you receive.
Then, check your transaction history with your bank or credit card company to determine the amount you’re currently spending each month.
This step can help you determine how much you’re spending versus how much revenue you’re taking in.
Monitoring monthly transactions will also help you to find unnecessary expenses that can be eliminated — or put on hold until your goal is met.
Reduce spending money on unnecessary wants versus important needs.
Necessary items include housing, utilities, and groceries. Nonessentials include entertainment, take out, or multiple streaming services.
Think of your income in terms of 50%, 30%, and 20% — meaning 50% of the monthly income is put towards necessities, 30% is reserved for emergencies or entertainment, and 20% is moved to savings.
3. Determine a Goal Amount
After you’ve examined your monthly income and expenses, you can use this information to determine how much you can put in savings.
Now, it’s time to think about your goals so you can determine how much needs to be saved.
If your goal is to purchase a new vehicle, research the cost of the vehicle, insurance, and DMV fees. This effort will give you an estimate of how much needs to be saved.
After the amount is determined, you might be surprised about the outcome. You may have overestimated and found you can afford more, or you may find that the expense is more than you can chew.
If the expense is more than you can handle, it’s okay to head back to the drawing board to determine your other options.
4. Decide Where to Save the Money
A piggy bank is a novel idea, but isn’t the best for your personal money management.
Instead, opt for a savings account at a trusted bank.
Popular options to help save for a goal include an IRA savings account and a Prime savings account.
Hudson River Community Credit Union offers a variety of savings accounts, all of which are designed to fit your needs.
The amount of money you’d like to put in your savings account can be moved quickly online, with the mobile banking app, or in person with a teller.
Our goal is to help you save for your future and the goals you have in mind for yourself or family.
5. Monitor Your Savings
Much like other goals in your life, you should make it a habit to check your progress.
Doing so will help you stay on top of your money saving goals.
Set time aside each month to periodically look over your financial activity and ensure your plan is still on track — and make adjustments if needed.
If you discover your savings aren’t quite where you’d like them to be, don’t get discouraged.
It’s more than a cliché, but life happens. So, if you check your savings on a regular basis, you can keep your goals in check.
If you need help getting started, contact our financial advisors. We’ll be happy to help you get on the right path towards your savings goals.