How to Hit Your Savings Goal

We all have a savings goal whether we are saving for our dream car, vacation, down payment for your first home, and so forth. 

It can be a daunting task to start saving for your goal.  Step one is the hardest with us often asking “Where do I begin?”   

It starts with manifesting your savings goal. “I need to save $1,000.00 dollars for my vacation.” The next step is to come up with a plan and follow through. This takes discipline, patience, and time.   

Now that you know how much you need, next is to determine the deadline for your savings goal. “I need $1,000.00 for my vacation next year.” How do you get there? You only have to use basic math skills to calculate a monthly savings target. This will make saving for your goal seem much more attainable. To calculate the amount needed per month, take out your smart phone calculator and start with your savings goal amount. Divide it by the number of months and that will equal your monthly savings target. In this example you would enter $1000 and divide it by 12 (months), which equals just over $83 per month. You only need to save $83 per month to go on vacation next year! That doesn’t sound bad at all, does it? 

Now that you have created your plan, the next step is to execute the plan to reach your goal. I recommend creating a sub account (additional savings account) and giving the account a nickname, “Summer Vacation” in this case. This will help motivate you to set funds aside for your goal and feel guilty if you remove funds from this account. You can use home/mobile banking to track your savings progress, which I must warn you – it is very addicting! 

You have created your savings goal, established your savings plan and begun to save, now what? Here are a few tips to make saving for your goal even easier: 

Auto Funds Transfer/Payroll Deduction – Take your monthly savings target and have it set up to transfer from your direct deposit or from an account of your choice on a weekly/biweekly/monthly basis. This way the funds are being set aside automatically and you are saving without even “missing” the funds. 

Pay yourself: We all deserve to treat ourselves, however, hitting our savings goal is the ultimate treat. I love a good latte/cappuccino, but I also enjoy reaching a savings goal. When the coffee craving hits, make a coffee at home, and skip the $5 coffee. Instead, deposit that $5 you were going to spend on a fancy coffee into your savings goal account. It takes great discipline to pay yourself using this method. The good news is this adds up much quicker than you would expect: Skipping one $5 coffee a week saves you $260 over the course of the year!   

This is an example of a basic savings plan, yet the principle remains the same: Create your savings goal, establish a plan, and follow through. I wish you the best to achieve financial success!   

Drew Lavacque

Consumer Loan/Member Service Manager

This blog is not on behalf of Peninsula Federal Credit Union.