We all know we should be setting aside money each payday for an emergency. But do you have a vacation, event or large purchase coming up? Putting aside funds for a specific purpose is saving for a reason.
Here are 4 simple steps to help you save for your reason:
Step 1 – Name your goal
What do you want to save for? Decide exactly how much money you need to meet your goal. If you’re new to saving, try starting with a small goal.
Don’t just think it, grab a pen and write down your goal, or better yet, rename your sub-savings account with the name of your goal. You’re more likely to success if you have a defined goal to save for.
Step 2 – Plan a timeline
How much time do you have before you need to reach your goal? 1 year? 6 months?
Whether you want spending money for a trip you’re taking at the end of the year, or need funds to buy books for your soon to be freshman in college – planning when you want/need your money is a crucial step for successful saving.
Step 3 – Calculate it
You can easily be precise in meeting your savings goals with some simple math. To reach your savings goal, divide the amount you would like to have by the number of paydays you have until you will need your funds.
Savings goal = ideal $ amount / # of paydays
Say you were saving for a $400 camera to capture the breathtaking views of the PNW. You could save $100 a payday for 4 paydays (saving for 2 months considering you get paid twice-monthly) or $50 a payday for 8 paydays (saving for 4 months).
Use the Savings Calculator to help with these calculations –
Step 4 – Evaluate
Now ask yourself – is the amount of money you would need to set aside each payday to reach your goal realistic? If not, it is time to reassess! Can you get by with less? Can you push your reason further in the future to allow you the time to save?
Remember that setting defined savings goals will help you succeed. If you find yourself frustrated after planning out a savings goal, don’t get discouraged! Start small, be realistic, and follow though – your future self will thank you.
Tools for Success
AAGCU Subsidiary Savings Accounts –
Did you know you can set up separate savings accounts at the credit union to personalize your savings needs?
These dividend-earning accounts can be opened over the phone or via email without a signature and appear on your credit union bank statement. Because these are separate savings accounts from your existing Regular Savings, it is easy to keep track the amount you are setting aside for your “reason”. You can even customize the name of the account to represent the reason.
Set up payroll deduction to have a portion of your paycheck directly deposited to your subsidiary savings account each paycheck. This is the perfect way to ensure you are putting away your calculated amount to achieve your goal. It’s easy – start saving for your “reason” today!AAGCU Savings Account >
Money Desktop –
Track your spending easily through visual budgets to ensure your budget is staying on track. Money Desktop is already embedded in AAGCU Online Banking, making it easy and convenient to access.
Link both AAGCU and external accounts to manage all of your spending!Money Desktop >
Banzai Financial Wellness –
Find countless tools including articles, virtual coaches, financial calculators, and more to help you learn how to achieve your goals, and set yourself up for financial success!Banzai >
Still not sure where to start? Check out this virtual coach to learn even more about saving for a reason.