Whether you’re saving for a holiday, new car, first home or perhaps a luxury item the first steps to success is setting yourself a savings goal. It should be measurable, realistic and timely. You might feel ambitious and set a super high savings goal, but you’d likely be setting yourself up for failure.
When deciding on a savings goal, think of a specific purchase or benchmark you could realistically reach in 12 months. The goal should require a little sacrifice when it comes to spending but you shouldn’t overreach.
Be picky about where you keep your savings
Have you had the same savings account since you were a young teen? It might be time to look at what banks have to offer.
Savings accounts vary when it comes to interest, fees and minimum balances, so do your research and find one that’s right for you. Consider extra costs such as monthly service charges and ATM fees.
The interest rate might sound minimal at first, but it adds up. Every little bit counts when you’re saving toward a specific goal.
Set up an Emergency fund
Life is fairly unpredictable, but one thing you can predict is that some type of unexpected expense is going to come up.
If you’re smart about saving, you’ll have an account dedicated solely to emergencies. Your savings account might be for big purchases, like a down payment on a house or a car, so it’s important that you don’t touch that money.
An emergency account can also be used if you lose your job or have to go to the hospital. This ensures you have something to fall back on without having to sacrifice the big purchase you’ve been saving for.
Cut back on spending
By making a few adjustments to your spending, you could end up with a whole lot of cash in your account by the end of the year.
Here are a few tips:
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