Setting saving goals can be tricky and might often leave you overwhelmed in the process. You can have one or multiple saving goals as long as you can budget and contribute to each one of them in a consistent manner.
So, let’s explore some ways that can help you set and achieve your saving goals.
Set a Specific Savings Goal
Like your other financial goals, your savings goals must be specific, measurable, achievable, realistic and timely (SMART). This will help you stay on track and make amends as and when required so that you reach your goals. Setting specific goals will also help you organise your finances in an efficient manner.
Make a Savings Timeline
Are you saving for a goal for six months or for a year? Once you have decided what you are saving for and how much you need to save, you must decide on a timeline to reach your goal. This will motivate you to stay on track and achieve your goals on time.
For a short-term goal like saving for a vacation in six months’ time, the timeline can be fairly simple to chart out. But for long-term goals like building an emergency fund or a retirement plan, the timeline can spread over several years.
Set Monthly Goals
After you have created a savings timeline for your savings goals, you must ensure that you are making monthly contributions towards them. For example, one of your goals may require you to contribute Rs 500 every month while another goal requires you to set aside Rs 2000 every month. So this translates to a total savings of Rs 2500 every month to reach both your goals.
Financial apps like Wizely can help you calculate and contribute monthly towards your savings goals.
Prioritize Your Goals
Prioritizing your savings goals is as important as creating them. Often the best way to create a priority list is to first clear off any debt that you might have. The interest rates on most credit cards and other loans can turn into huge amounts, if they are not paid on time. So on priority, pay off your debt.
Then focus on building an emergency fund that contains at least 3 to 6 months worth of your expenses. Once you are making good progress on your emergency fund, you can then start saving for your retirement. After you are on track with your emergency and retirement plans, then you can work towards other goals like saving for a house or saving for your wedding etc. You can also consider investing your money in various instruments such as mutual funds, stocks, bonds etc which can help your money grow over a period of time.
Use the Right Savings Tool & Automate Your Savings
Using the right savings tool can actually make the process of saving much easier and hassle free. For example, if you are looking to save for a relatively long term goal, then you can consider saving with mutual funds. Or maybe switching from one type of savings account to another can help you earn more interest on your savings balance every month. So make sure to pick the right savings tool and set up auto-transfer from your current account to your savings account.
Track Your Goals
Saving for multiple goals will mean that you need to keep a track of how much amount is going towards which of your goals. A good way to do this is to make separate accounts for each of your savings goals. This will help you track the progress under goal and prevent you from spending the money for other purposes.
It is a good idea to reward yourself for achieving significant milestones in your savings journey. This will help you stay motivated and work consistently towards your long term goals.
