How to Make a Successful Savings Plan
A savings account is one significant aspect of a sound financial diet. The most common form of saving money is through a savings account. Recently, online savings accounts have become popular for their interest rates and simplicity to consumers.
The current top rated consumer savings accounts available are Synchrony, Ally and Barclays. These accounts are online based and offer a variety of features so that you are able to deposit and withdraw funds conveniently, while still being able to keep track of your finances.
Before you begin saving, it is best to have a plan so that you are not hindered by surprises and are able to stay focused on your goals.
How to Make a Savings Plan 101
Make a full assessment of your current personal finances.
When starting a savings account, you want to first see where you lie financially. Take a month to assess your finances and review the savings options available to you based on your budget.
In this initial month of assessment, track all of your spending. This should include, your monthly bills (i.e. car payments, rent or mortgage payments, utility bills, etc.). For each payment, record the date and amount you paid. Try to be as accurate as possible, writing down the amount down to the tenth of a cent. Keeping your record detailed is important in order to have an accurate account of your monthly expenses.
Once you have reviewed your monthly expenses, take the time to evaluate your ability to save. Look for opportunities for spending less or cutting back on funds. Areas where most consumers can save in are electricity, cable, internet, grocery shopping and vacationing, among others.
Set clear savings goals.
Once you know how much you will be able to save based on your financial assessment, start creating clear goals for yourself. These can be both long-term and short-term. The more specific a goal, the better. Long-term goals can range from saving up for a new car to having enough for retirement, while your short-term goals should be along the lines of monthly milestones (i.e saving up for a cruise, savings $1,000, etc.).
Make sure to make your goals attainable, any goal that is not realistic could hinder your savings process and have you struggling to be successful. At the same time, your goals should also challenge your financial fitness, making them too easy could give you a misguided feeling of accomplishment. A good goal is challenging but practical at the same time.
Challenge your financial fitness often.
Once you begin the process of saving, you will start to notice changes in your spending and money management habits. As a result, you should take the opportunity to test your abilities and see how much further you can push yourself fiscally.
Think of other ways, you could save and optimizing your goals. For instances, instead of saving $200 a month, attempt to save $400 the next month. You want to keep improving when it comes to savings. There is never too much that you can save.
Add a retirement or emergency fund to your savings plan.
Once you have a savings fund, you can start branching out into other forms of savings, like a retirement or emergency fund. Each one serves a purpose and will be beneficial to have for staying financially stable. However, you should only attempt to take on these more advanced forms of savings once you have successfully implemented your basic savings program into your finances.
A retirement fund is only to be used once you have actually retired. This should be kept separate from your savings fund and not combined. One option is to make this another account at your current financial institution or through another bank. Another option, is if you already have a 401k plan offered through your job, make the highest contribution you can a month, especially if your employer matches. For instances, some companies offer 50% or if you are lucky, 100%, matching 401k opportunities. This is the perfect time to capitalize on the chance to meet your monthly retirement savings goal.
On the other hand, an emergency fund is more of a short-term savings policy. An emergency fund is a savings fund for the sole purpose of financial bailout during an unexpected or dire financial situation. Some of which include, a medical emergency, a car problem, moving costs, and many more.
When or if one or more of these emergency financial situations do occur this is when you will have your emergency fund to rely on. You will be able to use those funds as a temporary source of income or additional funds so that you can keep yourself in good financial standing.
Saving money is a lifestyle.
Savings is a financial behavior that you should act on regularly, it is not a one-time deal and is important for a successful future. When you are saving appropriately, you will worry less about your finances and have more time to devote to other aspects of your life.
Personal financial health is a process that should always include savings. Once you start saving, you can start improving your finances and reaping the benefits of being financial responsible and stable.
If you at any point you do find yourself with no savings funds, start at the beginning and start small. Savings is about time and will not happen over night. Take small steps to build your savings funds up and then begin to really challenge yourself.
There is also professional help that you can get if you feel that saving money is an overwhelming task. An expert will be able to give you the necessary tools and guidance to ensure you don’t struggle with money issues any longer.