Teaching yourself how to be smart with your money (spending and saving habits) is something that comes with time. Understanding the value of saving your money—whether it be for a lifestyle decision or to adjust to suddenly changing circumstances, it adds value to your financial situation.
Prioritizing saving doesn’t necessarily mean you have to live a completely frugal lifestyle. However, it does mean you will have to make a few adjustments to your financial situation in order to reach your goal. Of course it isn’t always the easiest thing to do, financial planning takes practice and may require months or sometimes even years to fully adjust. .
Having a strategy set into place to reach your goal will not only make it easier to obtain, but will also give you something to look forward to until you’ve reached it. Whether your next big splurge is on a new home, a new car or a gift for yourself, we’re giving you 5 tips on saving your money to reach your goals, presented by Capital One.
5 Tips on Saving Your Money to Reach Your Goals
1. Create a savings plan and stick to it
When you first decide on a big splurge, you should begin by doing a little research. This includes figuring out the cost of your big splurge and what it will take to reach your goal. From there, you can then create a savings plan to make sure your goal is obtained.
What’s the amount of money you are needing to save and how long will it take you to save it? Once you have answers to these questions, you will then need to create a savings timeline that makes sense and is obtainable.
Related: Capital One savings plan tips
2. Set up automatic bank transfer
Once you’ve set your monthly savings goal, you’ll want to make sure you’re adding to your savings account. One way to go about this is to make sure your savings are automatic. Capital One provides its customers with easy automatic recurring transfers which allows you to customize the date and amount of money being transferred. After setting up your automatic transfers, you’ll need to create a budget removing those extra funds.
3. Open a targeted savings account
Along with recurring bank transfers, it also helps to have a separate savings account for these transfers. By opening a targeted savings account specifically designated for your next big splurge, your money is less likely to be spent and consumed by other things.
4. Make strategic cuts and add them to your savings
Reaching your savings goal in a timely manner starts with cutting back on those unnecessary purchases. Consider making some serious cuts to the things that you truly don’t need to spend an extra dollar or two on and watch you obtain your goal even faster.
You’d be surprised to see how effective and plentiful cutting back can be. Whatever you decide to cut back on, make sure that extra money goes directly to your targeted savings account!
5. Stash away your “bonus money”
Many of us receive a tax refund each year. Others receive annual bonuses from work, financial incentives/rewards, and other forms of monetary commission. Whatever your “bonus money” may be, make sure you are fully taking advantage of the opportunity to stash some of it away into your targeted savings account.
When trying to reach your next big splurge goal, one of the best things you can do is stash that money away and keep your hands off of it! The quicker you reach your splurge goal, the quicker you can enjoy it!
Be intentional with your savings and create a plan that works best for you and your financial situation. For more information on finding the right savings account for you, visit capitalone.com.
Views expressed in this article are not necessarily that of Capital One.