01/15/2018: How to Save Money for Your Dream.
There are lots of reasons to save money: to buy a new house, take a dream vacation, buy a ’68 Mustang—or maybe to help your children graduate from college debt-free. But achieving big dreams like these means taking a disciplined, goal-oriented approach toward your finances.
The good news is that your biggest dreams are within reach. Getting there takes consistency and budgeting, but it’s worth it—and you’ll find that accomplishing your financial goals can be incredibly rewarding. You’ll also find that saving money gives you stability, freedom, and peace of mind.
Here are a few tips that will not only improve your finances, but will help you actively work toward making your biggest dreams a reality:
Follow the 50/30/20 rule. The 50/30/20 rule is an excellent guideline for most people. It means allocating 50% of your income for mandatory expenses (mortgage, food, bills), 30% for discretionary spending, and 20% for savings. So, for example, if you make $35,000 a year, you should plan to save roughly $580 per month. This money should be deposited into a savings account, which should be separate from your checking account.
Save creatively. You can get to your dream faster by finding creative ways to cut your expenses. Here are a couple of quick ideas:
- Ride your bike instead of taking a car.
- Keep your thermostat a few degrees cooler in the winter.
- Save one specific type of currency—for example, save all your $1 bills.
- Plan your meals and eat out less.
- Work out at home instead of paying for a gym membership.
- Use coupons. Every dollar adds up.
- Don’t forget an old-fashioned change jar!
Set savings goals. Figure out exactly what you want to accomplish and set a date for when you’re going to achieve that goal. Then create a plan and a budget that accounts for all of your day-to-day expenses. Make sure you aren’t spending all of your discretionary income, so you can use it as an extra cushion without having to dip into your savings. You can also add leftover discretionary income to your savings at the end of each month.
Use financial tools. You can grow your savings using low-risk investment tools including CDs (Certified Deposits) and 401K plans. Talk to a financial advisor about which options are best for you—and let us know how we can help with our wide range of financial services.
Think bigger. Once you reach a personal financial goal, you might move on to dreams that are bigger than you. The cost of raising a child until the age of 18 is now almost a quarter-million dollars, so if your dream is to start a family, saving is more important than ever. You may also be thinking about how to take care of your family after you’re gone to help them reach their own dreams.
Whatever your dream, you can get there by following these simple tips—and today is the best time to start. Just keep in mind that by thinking long term and using self-discipline, success is inevitable.
You can start saving right now by opening a savings account online. It’s easy, free, and you can start one with just $50. And if you want to talk with a banker about any of our services—or just about ways we can help you save—be sure to contact us today.