How do I decide which savings goals are most important?
Learn how to prioritize your savings goals to gain a clear idea of how to allocate your savings. After your expenses and income, your goals are likely to have the biggest impact on how you allocate your savings. For example, a common budgeting question is whether to pay down debt, save or invest. This interactive tool can help you decide. Or let’s say you know you’re going to need to replace your car in the near future. You could start putting away money for a new vehicle now. Just be sure to incorporate long-term goals, too. It’s important that planning for retirement doesn’t take a back seat to shorter-term needs.
Short-term goals
A savings account
A certificate of deposit, which locks in your money for a fixed period of time at a rate that is typically higher than that of a savings account
Long-term goals
Individual retirement accounts or plans, which are tax-efficient savings accounts
Securities, such as stocks or mutual funds.
Put your savings to work.
There are many savings and investment accounts suitable for short- and long-term goals. Look carefully at all the options and consider balance minimums, fees, interest rates, risk and how soon you’ll need the money.
Are there easy ways to save money?
Almost all banks offer automated transfers between your checking and savings accounts. You can choose when, how much and where to transfer money or even split your direct deposit so that a portion of every paycheck goes directly into your savings account. Other easy savings tools include credit card rewards and spare change programs, which round up transactions to the nearest dollar and transfer the difference into a savings or investment account.
How to Be More FINANCIALLY Healthy and Happy
- Make a budget – and start using it
- Try a budget app n your mobile device.
- Sign up for online banking and/or phone apps that your bank has in place.
- Start saving using the “Keep the Change” program that most banks offer.
- Cut up your credit cards and go to cash and debit cards only.
- To be more FINANCIALLY healthy and happy, start an emergency fund of at least $1000.
- To be more FINANCIALLY healthy and happy, refuse to make any more purchases.
- Try to pay off the smallest debt you have first.
- Tithe – give to God at least 10% of your income.
- Pray about your money, your debt, and your savings.
- Stay out of the mall and stores. Going only makes you want more stuff.
- Sell everything you can sell.
- Sell everything you can sell.
- To be more FINANCIALLY healthy and happy, find the little money leaks!
- You may have to say “NO” more often.
- Learn to be content with what you have now.
- To be more FINANCIALLY healthy and happy, learn all you can about money, debt, and savings.
Quick tip
Set a small, achievable short-term goal for something that’s fun and goes beyond your monthly budget, such as a new smartphone or holiday gifts. Reaching smaller goals—and enjoying the reward you’ve saved for—can give you a psychological boost, making the payoff of saving more immediate and reinforcing the habit.
The Bottom Line
Being rich doesn’t require joining the top 1% of income earners, or even the top 10%. Reducing debt, saving for retirement, and living within your means will increase your net worth and build a more secure financial future.
