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By Melissa Green | Citizens Bank Staff
Financial planning can be tough for anyone to wrap their head around. You're paying down student loans, your car needs repairs, and you're dreaming of home ownership — but you also really want to take a vacation. It’s easy to get overwhelmed when you’re living your best life and planning for your future at the same time.
Most of us will always have savings goals that concurrently compete for a place in our budget. You can reduce the stress it can cause by developing a savings plan. Read on to learn some tips to save for multiple goals at the same time.
It’s time to get specific about what you’re saving for. The old adage “it’s not a goal until you write it down” is not only motivating — it also helps you get organized. Specifying your savings goals will help you prioritize, track your progress, and keep you accountable. Whether you open up a new Excel document or construct a vision board, make sure your specific goals are written down. You’ll need both the goal and the amount you’ll have to save.
Now that you know what you’re saving for and how much you’ll need, it’s time to determine how long reaching each goal will take. Timing is a key component of any practical savings plan. Depending on the timing of your goals, you’ll need a different plan based on things like risk and return on investment.
Some of your goals will have a simple timeline, like the vacation you’re planning a year from now. Other long-term goals, like your retirement, can be harder to nail down. To simplify, you can set benchmarks or smaller goals, like saving $50,000 by age 30.
Since you’ve established when you want to accomplish each goal, it should be simple to calculate how much you need to save each month to meet your deadline. You may need to do some refiguring based on your savings potential and your monthly budget. That’s okay; you want to make sure your plan is feasible and realistic.
Prioritization is key when you’re balancing multiple savings goals. Decide which goals are the most important and which can wait so that you allocate your savings effectively. For example, you can spread out the money you save monthly toward each goal evenly, or you can allot a larger amount to a particular goal in order to reach it faster.
When it comes to prioritization, there’s no wrong answer — the best choice for you will depend on what you value most. For example, one couple might prioritize maxing out their 401(k) before saving for a vacation home, while another couple might do the opposite. Your current circumstances and future plans will help you determine your list of priorities.
Now that you have a plan in mind, you’ll want to choose the right saving tools for your goals. If you’ve had the same savings account since you were a teenager, you’re probably not making the most out of your money. You don’t have to stick to one savings account; in fact, multiple accounts can be a great way to organize your different savings goals.
Saving tools go beyond simple savings accounts. Below are a few options that you can use to reach your goals, as well as some links for more information.
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Every savings strategy or tool has its pros and cons. Before you make a decision, talk to an experienced financial advisor to help you make the best choices for your unique situation.
When you have multiple goals to save for, you don’t have to feel overwhelmed. Planning and prioritization can make you ready to reach them all. Let us help you find the light at the end of the tunnel.
Stop by your nearest Citizens Bank branch to speak with a banker who can help create a savings plan that’s right for you.
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