Tips on saving and investing to pursue your financial goals. Sometimes the hardest thing about saving money is just getting started. It can be difficult to figure out simple ways to save money and how to use your savings to pursue your financial goals. This step-by-step guide can help you develop a realistic savings plan.
Make a budget
Now that you have a good idea of what you spend in a month, you can build a budget to plan your spending, limit over-spending and make sure that you put money away in an emergency savings fund. Remember to include expenses that happen regularly, but not every month, like car maintenance check-ups. Find more information on creating a budget.
Plan on saving money
Taking into consideration your monthly expenses and earnings, create a savings category within your budget and try to make it at least 10-15 percent of your net income. If your expenses won’t let you save that much, it might be time to cut back. Look for non-essentials that you can spend less on—for example, entertainment and dining out—before thinking about saving money on essentials such as your vehicle or home.
Set savings goals
Setting savings goals makes it much easier to get started. Begin by deciding how long it will take to reach each goal. Some short-term goals (which can usually take 1-3 years) include:
Try the Bank of America savings goal calculator to see how long it will take for you to reach your saving goal.Long-term savings goals are often several years or even decades away and can include:
Decide on your priorities
Different people have different priorities when it comes to saving money, so it makes sense to decide which savings goals are most important to you. Part of this process is deciding how long you can wait to save up for a goal and how much you want to put away each month to help you reach it. As you do this for all your goals, order them by priority and set money aside accordingly in your monthly budget. Remember that setting priorities means making choices. If you want to focus on saving for retirement, some other goals might have to take a back seat while you make sure you’re hitting your top targets.
Different savings and investment strategies for different goals
If you’re saving for short-term goals, consider using these FDIC-insured deposits accounts:
watch your savings grow