Savings doesn’t help you build wealth, but it certainly prevents you from building worry.
While it may seem as though everyone is more concerned about investing their money — and rightfully so — this is a reminder that saving money for your goals is just as important.
If we didn’t learn any financial lessons over the previous year, one that should have resonated with everyone is that cash remains king. Governments across the world provided relief to their citizens in the form of cash stimulus. U.S. stimulus checks helped Americans pay off credit card debt, purchase necessities such as groceries and monthly bills, and save for future expenses.
To determine if the economy is healthy and to make informed investment decisions, investors gauge consumer confidence. High consumer confidence means people are spending more and saving less, while low consumer confidence reflects the inverse.
As it relates to your own personal finances, instead of solely being confident in your spending as a consumer, you should also be aware of your ability to put money aside for your short and mid-term goals. Becoming confident in saving money involves including yourself in the process as well as removing yourself from the process. When saving for your goals, you want to make sure your money isn’t costing you money, you’re intentional, consistent, and you appreciate your wins.
Here are four things to do to feel confident in saving for your goals.
Open a savings account with an online-only bank.
When it comes to savings accounts, not all banks are cut from the same cloth. And there’s nothing wrong with that because most banks have their area of specialization. However, it is up to you to choose one that’s most conducive to your savings goals. You want to choose a bank where your savings can be intentional, inconvenient, and interest-bearing. You should be searching for accounts that offer better than average interest rates, reputable customer service, no monthly or maintenance fee and deposit insurance.
Name the account(s) for your intended savings purpose.
One of the things that holds most back from putting money aside for their goals is intentionality. There’s a solution for that. Most online only savings accounts allow you to create buckets for your saving goals, avoiding lumping all your money in one account. Your buckets can include short term and midterm goals such as saving for vacation, purchasing a home, planning a surprise party for your parents, buying a car, paying for your child’s and more.
Make your savings automatic, not sporadic.
If you struggle with self-discipline to save for your goals, you should prioritize automation. Automating your savings removes the inconsistency when attempting to do it on your own.
You set the savings goal. Then, you set the transfer frequency and amount. And sit back and watch your savings grow. For example, if your goal is to save for a pre-owned car, you can name the savings account “[name of car] fund.” Secondly, determine when you want the transfer to occur – weekly, bi-weekly, or bi-monthly. Thirdly, set an amount to transfer that will ultimately help you reach your goal.
Even though automation removes the self-discipline to save, it will still take self-discipline to keep your savings intact. Don’t treat your savings as a checking remix account, where you put money in just to transfer it back to your everyday spending account because you want to have more fun.
Celebrate your milestones.
The journey of saving for your goals shouldn’t be a mundane experience. You don’t have to brag about your accomplishments, but you also don’t have to be modest about them either. You are allowed to spice up the money relationship by celebrating your small wins as you get closer to obtaining your goals.
The process of reaching your financial goal should receive the same energy that reaching the goal itself receives. If your goal is to save $10,000, celebrating at the $500, $1,000, $3,000, and $5,000 mark is just as important as celebrating only when you hit $10,000.
Celebrating your milestones gives you the self-confidence to keep going and it will consistently remind you of how meaningful the goal is to you. It will not only give you self-confidence, but it can also inspire others to prioritize their goals and act.