Saving Strategies To Reach Your Financial Goals
Whether you’re saving for retirement, a down payment on a home or kids’ higher education, these strategies will help get your funds to where they need to be.
What Are You Saving For?
Determine your short-term, mid-term, and long-term goals.
Example: Emergency fund as a short-term goal; Down payment as a mid-term or long-term goal; Retirement as a long-term goal.
Set A Timeline
How much will you save and when will you need it?
Example: By 2026, I will save $35,000 for a down payment on a home.
Build Your Savings Plan
Calculate a monthly savings amount for each goal.
Example: By 2026, I will save $35,000 for a downpayment on a home.
Create A Budget
Add the total monthly savings goals to your budget. If it’s more than you can afford, consider making a few cuts, adding estra income or choosing a higher-yield savings vehicle.
Tip:
Stock your emergency fund with at least three months’ expenses
before ramping up on other savings goals!
Choose The Right Savings Tool
A traditional savings account isn’t your only option when it comes to growing your savings. Find out which savings tool will get you the most bang for your buck!
Short Term Savings Goals: Low-risk accounts earning compound interest with higher Annual Percentage Yield.
• High-Yield Savings Accounts Pays up to 10 times the interest rate offered by traditional accounts.
• CDs (Certificate of Deposit) Must leave funds in for full-term to avoid early withdrawal penalties in most cases.
• Money Market Accounts Interest rates vary with the market.
Mid-Term Savings Goals: Low-medium risk accounts earning higher Annual Percentage Yield.
• 529 College Savings Plan For educational purposes only, can be invested.
• Mutual Funds Medium risk with potential to yield higher returns. Annual fees required.
Retirement Accounts
• 401(k) or IRAs are higher risk accounts invested over a longer period of time. You can withdraw penalty-free at 55 and 59 1⁄2, respectively.