What are some of your big financial goals that you’re saving for? Are you saving for a new house, college, or a new car? While spending is easy, saving for big financial goals can seem insurmountable. If you want to achieve your financial aspirations, here are several steps you can take in the right direction.
1. Make Your Goals Very Specific
How much are you aiming to save? Put a specific number to your big saving goals. How long will it take you to save that amount and what’s your strategy to get there? It’s helpful to create smaller chunks when planning for your big goals. For example, put a small amount of money aside every day or per paycheck so that your goal feels more achievable.
2. Differentiate Short-Term, Midterm, and Long-Term Goals
Short-term financial goals should be one year or less. Midterm goals are one to five years and long-term goals are more than five years. If you are building an emergency fund that is a good example of a short-term goal. Buying a new car or paying down student loans and long-term goals would be saving for retirement or buying a new house. Give yourself adequate time when saving for big financial goals so it doesn’t feel too stressful.
3. Determine Where to Put The Money You’ll Save
Once you have a specific goal and timeframe, think strategically about where to invest your savings. Make your money work for you by choosing the best place to grow your savings. If you’re saving for education a 529 account is appropriate. A high-yield savings account or money market account may be more appropriate for the money you’re saving for a house. Consult a financial advisor if you need guidance on where to put your savings until you reach your goal.
4. Set Deadlines and Check-In Points
When trying to save for big goals, hold yourself to your deadlines. Create check-in points along the way to examine what’s working and what’s not. You may need to adjust your budget and how much you are saving each month if you are feeling stretched too thin. If you’re not meeting your goal, take a hard look at categories where you can cut spending.
5. Limit How Many Goals You Manage at One Time
Saving for too many big goals can lead to failure. Try not to take on too much at once, but instead narrow your focus to one or two goals at most. If you are juggling more than one big goal, it’s a good idea to set up individual accounts for each goal. This way you can easily see if you’re on track for each goal.
6. Automate Your Goals
Don’t fall off the wagon before reaching your goal. If you’re struggling to stay on track, try automating your savings. It may be easier for savings to automatically be deducted from your checking account each month. You can also use budgeting apps like YNAB to track your goals for you.
Save for Big Goals Successfully
To save for big goals, you need a clear roadmap. Without planning and intentional execution, you’ll struggle to meet your financial goals. What are some of the big goals you’re saving for? How do you plan to reach your goals?
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