Everybody wants financial stability – just people go about it in different ways. For some, this means denying themselves their weekly treat at their favourite restaurant. Others end up renting cheaper apartments to save the extra dollars.
When it comes to saving plans, a one-size-fits-all approach never works. Everyone has their own saving strategy, but for most, getting started is the hardest part. If this sounds like you, don’t worry – because we’ve got the perfect solution: 3 effective strategies that will take you closer to your financial goals.
Set Short, Medium, And Long-Term Goals
One of the greatest ways to save some money is to visualise what you want to save for. Is it for a new business? A bigger house? A better car? You need the motivation to keep saving!
So, give a name to what you’re saving for, and set targets as well as a timeline for easier saving. For instance, let’s assume you want to go on vacation in 6 months and need $2000. You already have a target amount and can therefore come up with the amount you need to save every month to achieve the vacation goal.
Your savings goals can also be divided into three; short, medium, and long-term goals. In the example above, your 6-month vacation goal is a short-term goal. So you should figure out where to put money aside for your short-term goal – it needs to be in a separate account from the money you spend day-to-day (otherwise you’ll end up spending it instead :o), but also needs to be accessible for when you’re ready to book that trip.
If you have an upcoming wedding or need to save up for your children’s college education, your savings goals will be mid- or long-term. This should again be in a separate location from your short-term savings. Depending on how confident you are that you won’t need quick access to this in the event on some other emergency, you can look at savings products that pay higher interest but require funds to be kept in the account for a fixed period of time. Generally, a good approach is to mix account types: put some of your mid or long term savings in an account that yields good interest, and some in an account where it’s separate from your short-term savings but you can still access in a hurry if there’s an emergency and you need it.
Once you have a list of short, mid, and long-term goals, you will be able to separate your priorities and work hard towards achieving positive results.
Automate Your Savings
It’s so easy to spend your money when you don’t have a plan in place. Automating your savings will ensure that you have some money set aside for your different goals. An effective way of automating your savings is by setting up a recurring transfer from the main spending account into your savings account, and setting this to happen on the day you get paid. That way, moving money back into your spending account will be something you consciously need to do, and will give you the chance to think “do I really want to do this?” before making the transfer.
Lucy, the mobile banking app designed specifically for women, brings you one step closer to your savings goals by enabling you to set up multiple savings pockets, and allowing you to set a name and a goal against each one. Creating pockets is instant and free, and you can do it directly within the app. Having an account each for your vacation or your wedding, and tracking your progress is as easy as a few clicks on your phone!