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Saving money can feel daunting – especially when you’re working toward a major purchase like a new car, college costs or the down payment on a home. But forming a plan and intentionally working toward your goal can make saving money so much easier.
Key Takeaways
The first step is deciding what you’re saving for. While it’s always good to save, no matter the reason, saving for the sake of saving might not motivate you as much as a goal with a clear target. Instead, consider a goal you want to achieve and attach a dollar amount and timeline to it.
For example, your savings goal might be:
Once you know the amount you need and when you need it, you can break the goal into small, manageable steps.
An effective method of setting a goal and actually achieving it is to follow the SMART method by making sure your goal is: specific, measurable, achievable, relevant and time-bound.
Specific
Decide what you’re saving for.
Measurable
Choose a dollar amount so you can track your progress.
Achievable
Make sure the amount you choose is possible within your budget (even if it’s a bit of a stretch).
Relevant
Pick a goal that matters to you. Your reason for saving can be your biggest motivator.
Time-bound
Set a deadline to help you stay accountable.
For example, instead of saving for a vacation, you might plan to save $2,400 for a trip to New York City in 12 months by setting aside $200 each month because you’ve always dreamed of seeing a Broadway show.
Once you know your goal amount and deadline, divide your total amount by the number of weeks or months you have to save. Remember, small, consistent contributions can add up quickly. If you save $100 every week for a year, you’ll have more than $5,000 by the end of the year.
$100 × 52 weeks = $5,200
If your budget is tighter and you have a longer timeline, small, consistent contributions can still add up. If you save $100 every month for five years, you’ll have $6,000 to put toward your financial goals.
$100 × 12 months × 5 years = $6,000
A savings account or CD with a competitive interest rate can help you grow even more money over time.
Explore OptionsA savings calculator can make it easier to figure out how much to save and how often in order to reach your goals. By entering your goal amount, timeline and current savings, you can quickly estimate how much you need to set aside each week or month. You can also experiment with different timelines to see what feels realistic for your budget.
Gate City Bank has tools that can help you make saving more convenient and easier to manage.
Savings account
If you keep the money you’re trying to save in your checking account, you might be tempted to spend it. Open a savings account to separate your savings. You can even label the account with your goal to keep your “why” top of mind.
Digital banking
Use mobile and online banking to monitor balances, transfer money, review transactions and stay connected to your accounts – and goals.
Savings alerts
Stay motivated and informed by setting alerts that let you know when you reach your goal or when your progress may be at risk, helping you stay on track.
Automatic transfers
Consider setting up automatic transfers from your checking account to your savings account on payday. You can choose an amount that matches your goal, and when money moves to savings automatically, you’re less likely to spend it before you save it.
Certificate of deposit
If you have a longer timeline and you want to earn more interest than a typical savings account, consider opening a CD. Choose the term and rate that best fits your goals.
Bottom line: Setting a savings goal doesn’t have to feel overwhelming. Start with a clear target, use a savings calculator to break the amount into manageable steps and build saving into your routine. Then, use helpful tools like automatic transfers and savings alerts from Gate City Bank to stay organized and motivated!
Whether you’re trying to stick to a budget or grow your savings, explore helpful resources designed to meet your goals – and meet you wherever you are.
Do you have an emergency savings account in place? Learn more about how it can help offset expenses from an unforeseen financial crisis!
If you’re looking to grow your savings faster, we’ve got you covered with nine basic tips!
