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How to Set Savings Goals and Stick with Them

Let’s face it.  Saving is probably not your favorite thing to do with your money but it’s necessary.  We should save money to afford purchases we plan to make. Some of those purchases will be for things we need and things we want.  We should also save money to plan for the unexpected.

Since there isn’t an unlimited money fountain in your home, you need to decide what to save for and how much you can afford to set aside for that goal.  Chances are, you have more than one savings goal.  You may want to save for a trip, car, house, a sizeable donation, retirement, the kids’ college tuition, or to start a business.

As with most financial decisions, people have very different ideas about how to manage their savings.  They come up with reasons and amounts to save based on their wants and needs. I find having a separate bank account for those special goals makes it easier to discipline myself to succeed. When it comes to saving, some places are better than others, depending on when you’ll need the money.  This is called your time horizon.  Before picking an account, you should ask yourself if you will need the money in a short-term (less than a year), medium-term, (three-five years), or long-term (five years or more).  This will help you decide whether to save in a bank account or to take more risk by investing your money in stocks.

How do you figure out how to save for everything? First you determine how much money you have after paying for your current needs and wants.  Then it’s a matter of dividing what’s left.  For example, many financial experts recommend you save a minimum of 10 percent of your income for retirement and 20 percent to be safe.  Whatever you decide, don’t let these percentages thwart your savings efforts.  Even if you start small, start! It will add up over time.

Once you have decided what to save for, how much to save for it, where to save for it, and your time horizon, you need to put your savings plan into action.

Here’s an example of how I achieve a short-term goal:


  1. Create a timeline. If you have 6 months to save to reach your short-term savings goal of $1800, that equals about $300 per month, which means $75 each week. Then eliminate wasteful spending.  If you still don’t have room in your budget, add “increasing your income” to your timeline.
  2. Get a job, a side job, or a legal side hustle and start saving. What special skills do you have that could earn you money? Put on your thinking cap and get those creative juices flowing. You know you need to save $75 per week to achieve your goal. Set up a separate bank account for this goal, then set up an automatic deposit or discipline yourself to go to the bank each week.  Before you know it, your bank account will grow and you’ll reach your goal.

3.Create a lifestyle plan. Now that you’ve achieved your goal, keep that momentum going. Don’t stop!

Continue to save for other future goals.  If you keep going, you are on your way to enjoying a life of financial freedom.

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About Touya Kelley

Touya Kelley has spent the last 5 years of her life offering financial solutions to people. On her personal finance blog Break Free And Win, her goal is to help and encourage others to manage God's money well.

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