Yahoo Finance 8 Key Signs Your Savings Is On the Right Track
It’s no secret that saving money is a wise financial move. The cash you accumulate in savings can serve as a financial safety net, help you meet short- and long-term financial goals and, eventually, allow you to live life on your own terms.
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However, just like eating right and exercising, it can be challenging to stay motivated and on track while saving month after month and year after year. If you’re struggling with meeting your savings goals, you’re in the right place. From remembering your “why” to striking a balance between spending and saving, here are eight helpful ways to stay motivated while saving money — straight from financial experts.
Remember Your Why
“One secret to staying motivated to save is remembering why you want to do it in the first place,” said Laura Adams, MBA, a personal finance expert with Finder.
“If you wish to buy a dream home, put kids through college, retire early or get a handle on credit card debt, keeping those objectives in mind is critical. Consider writing your financial goals on sticky notes and attaching them to your credit cards, bathroom mirror, car dashboard and any spot likely to get your attention frequently.”
Share Your Goals
“Telling a trusted friend, family member or financial advisor about your goals can help hold you accountable,” said Northwestern Mutual financial advisor Dexter Wyckoff. “They can also provide support and encouragement as you make progress on those goals.”
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Make Saving Automatic
“When you feel motivated to change your finances, take advantage of that energy by automating your financial goals,” said R.J. Weiss, CFP and founder of The Ways to Wealth.
“Set up automatic transfers from your checking to your savings account, enroll in your employer’s retirement plan or increase your savings contributions. This simplifies the process and makes it easier to stick to your plan without relying on willpower alone. Plus, it ensures that your goals are consistently worked on, even when you feel less motivated.”
Break Down Larger Goals
“To achieve your long-term financial goals, i.e. goals longer than one year, it’s crucial to break them down into specific, short-term objectives,” said Weiss.
“For instance, if your goal is to save for a house, it can take years to achieve it. A short-term goal, such as not eating out for 30 days, can help you achieve your ultimate objective. To set effective short-term goals, be as specific as possible. Avoid vague statements like ‘I want to save more money this month.’ Instead, set a specific target: ‘I want to save $500 this month by packing my lunch every day and limiting my spending on entertainment to $50.’ This way, you have a clear objective that is measurable and achievable within a set timeframe.”
Take Advantage of Higher Yields
“Taking advantage of higher interest rates can mean your savings makes money for you when it’s just sitting in the bank — and that can be enough motivation to keep putting money away,” said money-saving expert Andrea Woroch. “Move your savings to a high yield online savings account such as Bread Savings, which is currently offering 4.25% APY (the amount of interest you will earn on your savings, compounded daily!).”
She continued, “Compared to the national average interest offered by a traditional savings account that hovers around 0.26%, making the switch could help you reach your savings goals much faster without having to put as much of your own money away. When you see your money making money on its own, you will be motivated to keep adding to it to grow passive earnings even more!”
Celebrate Milestones
“Celebrating milestones is a great way to stay motivated when saving money,” said Daniel Colston, a certified financial planner and CEO of Upward Financial Planning.
“Every time you reach a savings milestone, such as saving $1,000 or $10,000, take a moment to celebrate your progress. This can help you stay motivated and continue working towards your long-term savings goal. In addition to celebrating, we recommend finding ways to reward yourself in the moment for reaching these milestones. Of course, don’t reward yourself for saving $1,000 by buying a new laptop, but perhaps by going out for a drink with friends or doing something you love on a free afternoon!”
Seek Support
“Saving money can be challenging, so it’s important to seek support from friends and family,” said Colston. “Surround yourself with people who support your financial goals and can help keep you accountable. Consider joining a savings group or seeking out a financial advisor who can offer guidance, support and even accountability.”
Strike a Balance Between Spending and Saving
“Everyone has different needs when it comes to money,” said Curt Martin, a financial coach and co-founder of Martin Money. “Some people have a more difficult time staying focused on their saving goals than others. If the process of saving becomes too much of a grind, there’s a danger that you might quit trying altogether.”
Martin added, “For people who need a little emotional boost, I encourage them to set aside some money regularly that they can spend on anything they want, no questions asked. The expectation is this is an expense that is well-planned, with boundaries for how much is spent and how often this money is used. In this way, there’s still the benefit of an emotional boost without the recklessness of a sudden spending binge that could knock your savings plan completely off course.”
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This article originally appeared on GOBankingRates.com: 8 Key Signs Your Savings Is On the Right Track
