Saving for a major life event such as getting married, buying a home, or starting a family can feel overwhelming. Financially preparing for these or any other future event is key to accomplishing those specific goals without breaking the bank. Here’s some helpful tips on how you can get there through goal setting, budgeting, and time management.
Identify Current Expenses
Do you know where your money goes? The first step in planning for a major life event is to review your current income and expenses to identify areas of potential savings.
Set A Savings Goal
Next, find out how much you need to save to achieve your goal. Begin by researching the average cost of the event and then add in any additional or indirect expenses that might occur. Your savings goal should have a cushion for unforeseen expenses.
Time-To-Goal
Once you know how much you need to save, determine how much time you have to save for it. Long-term savings goals include saving for college and buying a home, while short-term goals include saving for a down payment on a car or for a trip. In every case, it’s always best to start saving as early as possible to maximize the savings benefits for your target goals.
Start Saving
Divide your total savings goal by the months you have before the event. This is your target monthly savings amount. Based on your budget, do you have enough funds available to meet this savings plan? If not, it’s time to review your discretionary expenses and identify areas where you can reallocate your money. Look at expenses such as subscriptions services, food, and entertainment to see where you can cut back or do without.
Keep Savings in Separate Account
It is a good idea to establish a separate savings account as you accumulate funds for your savings goal to track your progress and to keep that money out of reach. A great way to save is to have money automatically deposited into your savings account through Direct Deposit.
Review Your Budget Often
Some life events, such as weddings and vacations, will have a period of building up savings followed by a flurry of expenses incurred over a short period of time. Other goals that you have saved for, such as a new baby, will continue to carry expenses for many years to come. Remember to review your budget often and move money to where you need to save most.
Once you have accomplished your initial goal, look to the next and keep building your good savings habits. Having a financial plan and a strong commitment to saving can help you manage the expected and unexpected changes you may encounter in today and in the future. Credit Union of Denver offers various accounts for you to grow your savings goals. Check out our CDs, Money Markets, and Holiday Savings Account.