Saving money isn’t the easiest thing to do, especially if you’re not a saver by nature. But with a solid goal and a clear plan, you can meet your own personal savings targets. Here are a few steps to take to make it happen.
Set a goal. To be able to meet your savings goal, first you have to set one. Don’t just set your goal based on a random number you pull from thin air. Consider how much you can actually put towards savings to come up with a goal. You can set your savings goal based on a percentage of your annual income, e.g. 10%, or you can use your budget to decide what you can comfortably put toward savings each month.
Pick a deadline. If you’re starting out at the beginning of the calendar year, you’ll probably want to set your deadline for the end of the current year. You can set the deadline for anytime you’d like. If you’re taking a summer vacation, for example, you might decide to make the deadline by late Spring so you’ll have the funds available when you’re ready to book your trip. Having a firm deadline gives you something to work toward.
Map out a plan to reach your goal. Once you know where you want to go, the next step is to figure out how you’re going to get there. To do this, you’ll have to decide how much you’re going to save each month and where you’re going to put your savings. The simplest way is to divide your annual savings goal by the number of paychecks you’ll receive each year. The result will be the amount you must set aside from each paycheck.
For example, if your goal is to save $12,000 by the end of the year and you’ll receive 24 paychecks, you would have to save an average of $500 from each paycheck to reach your goal.
Prepare for unexpected expenses. Throughout the year, major and minor unexpected expenses may pop up and threaten to derail your progress. How you handle these expenses will play a key role in whether you’re able to meet your savings goal. One way to prepare for unexpected expenses is by keeping a separate emergency fund that you can turn to when you these expenses come up. Consider also saving more than you need to know you have some wiggle room to cover unexpected expenses.
Look for little ways to get extra money. If you’ve set an aggressive savings goal, relying on only on your paycheck may not be enough to get you where you want to be. Consider bringing in some additional income through overtime work, a part-time job, side gig, selling things on the internet, or by picking up some freelance work. There are a number of ways you can make extra money right from home. The more you can bring in, the more you can put toward your savings goal.
Make sure you’re keeping track of your progress throughout the year. Don’t get discouraged by setbacks – they happen to the best of us. Keep working to get as close to your savings goal as you can.