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As we start a new year, many of us are looking back on our financial accomplishments of the past year and planning fresh savings goals for the future. There are several ways to go about arriving at a new financial destination, such as using a savings goal calculator, utilizing automatic deposits into a savings account, or speaking with a financial advisor at your bank. Setting savings goals is one way you can make the most of your financial well-being this year. Keep reading for some tips and strategies for doing just that.
Decide How Much You Need to Save
Deciding how much you’ll need to set aside in a savings account depends on what you plan to do with the money. If you’re simply looking to have rainy-day funds available for the unexpected, you may not have or need a fixed goal amount. It will, however, benefit you to look at your budget and decide how much you can afford to put into savings and how frequently. As you adjust your budget, consider your outgoing bills and expenses, changes in your tax status, and other details that may impact your budget.
If you’re saving for a specific upcoming expense, such as a down payment on a house, a wedding, or higher education, you’ll also need to factor in how soon you need the money as you determine your budget. Use a savings goal calculator, like Riverview Bank’s Accumulate Savings Calculator, to crunch the numbers, visualize your savings goals, and plan your savings process over the time you have.
Think about what you want to accomplish in both the long and short term. Make a list of your goals and then explore what it will take to achieve those goals. Once you know what you want to accomplish and how much it will likely cost, you can use a savings goal calculator to plan your next steps.
Adopt a New Budget
Once you’ve set some goals and calculated what it will take to achieve them, it’s time to adopt and adapt to a new budget. If you’re new to saving, you can transition into a new budget mindset by focusing on making small changes that will help you reach a small savings goal first. Try setting a manageable savings goal you can reach within three months. Use a savings goal calculator to track your progress along the way, making changes where you need to.
Whether you’re learning to save for the first time or you’re a seasoned saver, there is never a bad time to make a positive change. Don’t be afraid to speak with a savings expert at your local bank if you need guidance with building a new budget and sticking to it.
Utilize Savings Tools
We’ve talked about the benefits of using a savings goal calculator to help you achieve your savings goals, but there are other tools that can help as well.
If you don’t already have a savings account, set one up. It’s easy and typically free, and it provides a secure place to store your money while it accumulates. Since it isn’t a checking account, you’re also less likely to frivolously spend the funds you’re trying to save.
Once you have a savings account, you can up your savings game by automating deposits into your account. At many financial institutions, including Riverview Bank, direct deposits and scheduled fund transfers can be made to add money to your account. Automation makes reaching savings goals easier because you don’t have to remember to set money aside.
Another effective savings strategy is opening a higher-yield account, such as a money market or certificate of deposit account. Money market accounts allow you to save while you earn a premium annual percentage yield (APY). These accounts are ideal for clients who maintain higher savings balances and want their money to work for them.
CD accounts offer higher interest rates than traditional savings accounts as well when you sign up and choose a fixed term length. While you typically can’t access the funds in your CD until the end of this term, your savings account balance will grow through interest without any additional work on your part. Your preplanning and number-crunching with a savings calculator can help you determine if a CD is right for your needs and, if so, the term that will suit you best.
What If I Don’t Meet My Goal?
Even with meticulous planning, there are some things you just can’t control. Unexpected occurrences, such as a change in job, can impact your budget and savings goals. If this happens, adjust your goals to make them work for your situation and new priorities. Little changes, such as extending the time period for reaching your savings goal or opting for a less expensive version of a big-ticket item, can help you still achieve what you aimed for. You can once again use a savings goal calculator to make adjustments that will get your savings back on track.
The path you take to reach your savings goals in the new year will be unique to your budget and individual situation, so take time to understand where you’re at, what you’re trying to accomplish, and what you need to do to accomplish it. By adapting to budget changes, using a savings goal calculator, and speaking to a savings expert, you’ll be on your way to successfully reaching your savings goals in the new year.
Start your savings journey by opening a savings account at Riverview Bank. Visit one of our Pacific Northwest branches. We’re here to help you plan for a financially rewarding future and look forward to finding new ways to help you reach your savings goals.