Steps to Developing Savings Goals and Savings Plans

Developing savings goals and savings plans can seem overwhelming! If you are accustomed to spending every dollar you see and even the unearned income that you can’t see, it may feel like your breath is being snatched away when someone suggests you start saving.

Take heart. Saving is good for your present and your future. Disciplining yourself now to save can help to  bolster your self-esteem and build your internal sense of trustworthiness as you keep your word about saving. The future will feel more promising too, if you have some savings to keep you financial stable, no matter what twists loom in the economic forecast.

Formulate your savings goals by asking yourself, “What  item would I like to purchase within six to 12 months that I can not afford if I wanted to buy it today?” Asking yourself this question leads you on the path to saving. Writing down this item and projecting how much you can save each month in order to build up the required cash has lead you to creating your first short-term savings goal. Congratulations: you are now starting a major financial skill in your life!

Create a more extensive list for goals that will take five or more years to achieve, for example paying for your child’s college tuition or retirement. This financial notation process will be the same:calculate how much you will need to save each month to get to the goal and then look to put that money in a savings account or Independent Retirement Account also know as IRA.

Planning to save is a more extensive version of developing saving goals. Planning to save, really means asking yourself, “What vehicle or means will I use for saving?” Do I need a  savings account, checking account, Certificates of Deposits (CDs) 401k or 457 plans, or annuities, or IRAs? [Note: each vehicle has it benefits and disadvantages, so you do want to get professional financial advice in order to use what’s best for your individual situation.] Choose the savings vehicle(s) that best match your savings goals.

A word of caution: keep going until the various accounts you want are actually open! The savings plan will only happen when you take the time to answer the financial questions that are swirling around in your head!  Do the research by Internet or by phone! Force yourself to take the extra time at night to do the research or take a vacation day off from your job and go to talk to a professional financial advisor.

Do the work, ask the questions, get the answers, and by all means open the accounts! Your financially stable life awaits!