No matter your age, everybody has financial goals in mind. Whether it’s saving for a car, buying a home or planning for retirement; setting attainable financial goals and tracking your progress is key to making sure that you achieve those goals.
Setting Your Goals
First, it’s important that you determine your short-term and long-term financial goals, so you know how much money you’ll need to save for each goal. For example, if you want to go on a dream vacation, do you want to stay at an expensive 5-star hotel or do you want to stay somewhere more budget friendly? For each goal, compare options that are at the top end of what you’re willing to spend to those that are somewhere in the middle. This might take some research but it is crucial to have a realistic expectation of cost. That way you know, up front, how much you’ll need to save for each goal.
Now that you’ve figured out your goal’s target amount, the next step is to figure out your target date. For example, are you planning your vacation for six months or 12 from now? Knowing when you want to reach your end-goal allows you to allocate the proper amount to savings.
Staying on Track
It’s time for the hard part – staying on track. Most people have multiple accounts from different financial institutions so it can be difficult to manage incoming and outgoing cash flow. To ensure that you are saving the right amount each month, you can arrange for a portion of your paycheck to be sent directly to an account that’s dedicated as your “vacation” savings account. This “set it and forget it” strategy will help you stay on track and because the amount comes directly from your pay, you wont have time to spend it on other things. Just make sure to adjust your other expenses so that you aren’t overspending. One of the best ways to stay on track is to use budgeting tools that allow you to set and manage your budget. Pacific Service CU’s MoneyManager can consolidate your accounts from all of your financial institutions into our online banking portal. With MoneyManager’s budgeting tool, you can see which spending categories you are within budget, on budget or even over budget for the month.
Check Your Progress
Periodically check in on your progress. Seems obvious, but when you see the balance start to build you may find that you want to allocate more money towards your target to speed up your progress. You may also realize that you’re not saving enough and need to increase your direct deposit. Also, review your budget often to see if there’s some dollars that you would be saving that you hadn’t accounted for.
We wish you happy savings for 2020!