Reach your savings goals
Setting goals for yourself – whether large or small, short or long-term – is exciting and motivating. Your goal could be as simple as getting organised and putting some money aside for emergencies. Or you may want to go on a holiday, buy a house or car, or afford a comfortable retirement.
Whatever your circumstances, by working out your goals and starting a regular savings plan, you can begin to make your dreams become a reality.
Your savings goals
What do you want from life? Your goals may change at different stages or events in your life. Perhaps you have a short-term goal that you want to achieve in the next year or two, and a long-term goal that could take you 5 or more years to reach.
Think for a moment, then write down some possible goals. Now:
- What is your top priority?
- How much will it cost?
- When would you like to achieve it?
If you have borrowed money on a high interest rate, make paying off that debt your priority before saving for other goals.
Using the savings plan
- List your savings goals, such as paying off a debt, going on holiday or buying a home. Work out how much money you need and how long it will take you to save that amount.
- Write down ways you can save money to put towards your goal. Use a budget planner to see where you could cut back on optional extra things like entertainment, dining out and shopping. Decide how long you will need to cut down on those items to achieve your savings goals.
- Print out your savings plan and put it on your fridge or somewhere you will see it every day. This will keep you motivated and on track.
Saving for a short-term goal
Short-term goals are things you want to achieve within the next couple of years. These goals could be to pay off your credit card debt, buy a new TV, go on a holiday or buy a car. Whatever you have in mind, set yourself a realistic timeframe.
The best way to save for short-term goals is to reduce your spending on non-essential items, like entertainment, dining out, memberships or subscriptions. It is often easier to stay on top of your spending if you use cash, EFTPOS or a debit card when shopping instead of using your credit card.
Make your savings work for you by putting your money into an account where it will grow. Savings accounts are great because you can earn compound interest on your savings.
If you’re on a low income, you may qualify for one of the savings programs offered by some charitable organisations.
Saving for a long-term goal
Long-term goals are plans you want to achieve in around 5 years or more. This could include buying a home or paying off your mortgage, paying for your children’s education or saving for retirement.
As for short-term goals, look for ways to cut back on your spending in order to boost your savings.
For long-term goals think about investing some of your money. Get some financial advice to work out a good investment strategy to reach your goals.
Be realistic with your timeframe so you don’t make it too hard on yourself to reach your target.
Money for emergencies
Whatever your goals, it’s a good idea to put some money aside for emergencies. Keep this ‘rainy day’ fund separate to your savings and everyday money. As a guide, aim to save up enough money to cover your expenses for 1 to 3 months. Remember to keep this money for real emergencies and top it up again after you use it.
Saving is easier than you may think. The trick is to start small and start now. Set your goals, create your savings plan and begin to make your dreams a reality.