We've all saved for a large purchase at some point in our lives, whether you are a teen saving for a new skateboard or an adult saving for a first home.
Before you jump into saving, it's essential to understand and set your personal financial goals. Getting honest about your short- and long-term goals will help you create a budget and save for your purchase. Follow these guidelines as you set your goals:
- Be realistic. Look at your life right now and consider what needs to happen in order for you to achieve your financial goals. Are you in debt? What is your salary? What are your spending habits? You may need to adjust your expectations based on your life situation. For example, a mother working part-time may not be able to afford a brand-new car every couple of years.
- Be specific. What is your endgame? Establishing a clear and well-defined goal will help you track and measure your progress and will keep you motivated. For example, a large undefined goal is, "I want to buy a car." We hear you, but perhaps your real goal is to save money for a car. Thus, your specific goal is, "I want to save $5,000 for a down payment to buy a car."
- Have a Timeframe. How long will it take you to accomplish your goal? Grab your calendar and establish a target date. This deadline will help you prioritize it over everyday tasks that arise. A time-specific goal could be, "I want to save $5,000 for a down payment to buy a car within the next 18 months."
- State the Action. How will you make your goal a reality? You chose your target date. Now, consider the smaller actions or goals that need achieving to help you reach your larger goal. Add these actions to your timeline. An example of your action statement could be, "I want to save $5,000 for a down payment to buy a car within the next 18 months. I will start depositing $280 into a savings account each month until I reach my goal."
Download a PDF of these 4 guidelines to help you set your goals.
Congrats! Now that you have completed these four steps, you are ready to take the first step towards achieving your goal. We're on a mission to help our members save smarter. That's why we've created a Goal Savings Account to help you visualize your target, track your progress, and manage it all in our mobile app.
Have questions? As a member, you have access to a personal concierge—your go-to for help setting and achieving your financial goals. It's their full-time job to help you navigate the details of spending, saving, and planning for the future. Best of all, they're here whenever you need them. Happy saving!