How to save a thousand dollars
Setting and meeting short-term financial goals often presents a challenge and is not always easy, but it is possible, using common sense and ingenuity. The following tips on how to reach a short-term financial goal of a thousand dollars may prove to be beneficial to you.
Distinguish between short-term and long-term financial goals.
Recognize that there is a difference between short-term and long-term goals. For example, perhaps you want to save a thousand dollars for the down payment on a new car. Initially, you may be asking yourself if you can take that money out of a previously established retirement fund.
Is it a wise thing to do?
There is an old saying, “Do not rob Peter to pay Paul.”
In other words, your new financial goal of saving one thousand dollars is a short-term goal and your previously established retirement fund is a long-term goal. Do not take money out of your retirement fund to meet the needs of a new, short-term goal.
Determine exactly how much money you need for your new, short-term goal.
You may consider doing research into car purchases, because what you think may be sufficient for the down payment on a new car, may not be exactly what you need. In other words, you may need more than a thousand dollars. Take into consideration other possible expenses and find out exactly how much you need to save. Set that as your new, short-term financial goal.
Determine approximately how much time you are allotting to yourself for saving the money.
Time is important in terms of being realistic about saving money. You may need to extend your proposed time, if necessary. Trying to save too much money, too fast can be frustrating, at times. Allowing too much time, can deter saving money and increase the likelihood that you will spend the money you save, elsewhere.
Establish a budget.
Being aware that you should not use your long-term savings, you may be asking yourself where you will find the extra thousand dollars to put a down payment on a car.
If you have not already done so, set up a budget that includes your actual income, weighed against your fixed and variable expenses. Then, begin to look seriously at your current variables, or financial ‘needs’, as opposed to your ‘wants and desires’.
Make certain that you always have enough money to cover your fixed expenses first, on a monthly basis. Be aware that you can adjust your variable expenses in such a way that you are actually saving money. Keep a record of everything that comes in and goes out, as well as how much you are saving.
Set up a savings account.
If you have not already done so, set up a savings account for the money that you are saving. Determine approximately how much income you are saving every month, by adjusting your variable expenses. Meet financial ‘needs’ rather than ‘wants’. Saving this money consistently, instead of spending it, is an important step towards reaching your new, short-term financial goal of one thousand dollars.
Include emergency expenses in your savings account.
When you are setting up your savings account, make certain that you are allowing enough money to cover a six-month period, in case your source of income is lost or compromised, in some way. You may also need the money to make car payments later. In other words, save for ‘a rainy day’, as well.
Consider taking on other employment.
When you are not able to make your budget meet in such a way that you can reach your financial goal within a reasonable length of time, you might want to consider taking on other employment to meet your short-term financial goal.
Consider other possible options.
If you are aware that your financial needs are in excess of your actual income, you might consider selling some of your previously accumulated assets, things that you no longer need, or want. In other words, weigh your assets against your liabilities. Selling some assets can raise extra money that you can then save towards your short-term financial goal. You might consider taking out a loan. Remember loans accumulate interest that has to be paid. At times, interest rates can be relatively high.
If you are into more serious saving, consider consulting a financial manger to assist you in investing wisely.