If you've been putting off dealing with your finances recently, the new year is as good a time as any to focus on your financial goals. After all, it's a fresh start and a chance to think about your priorities. Setting a savings goal and sticking to it can be difficult if it is not realistic and you're not committed to it, just like other any New Year's resolution.
To start, make your financial goals significant but achievable. You want your efforts to result in the growth of your savings account and reduction of your debt. But, if you set your goals too high, they may be hard to reach. So, to help you break down your savings planning into manageable portions, consider defining both short-term and long-term goals. So, to help increase the success of this resolution, follow these tips.
To figure out what your immediate savings goal is, you'll have to take stock of your current financial situation. Start by adding up your sources of income and your monthly expenses. If your math reveals that you overspend on groceries, go out to dinner too often, buy too many clothes or get carried away with spending on vacation, this will help you craft your savings plan. For example, your first move can be reducing your spending in one of those areas and depositing the difference into your savings account.
Then, with your income and expenses in mind, set a goal to save a reasonable amount of money this year. Remember to keep it realistic so that it fits in your budget and isn't straining your finances. Divide that savings goal by 12, and set up automatic transfers from checking to savings for each month. This is the easiest way to reach your savings goal. The automatic transfers let you set it and forget it.
By performing these two simple tasks, you've actually achieved a lot: Your savings account is growing and you're reigning in your spending.
With your short-term savings plan working for you, it's time to turn your attention to longer-term savings goals. Building your everyday savings account is certainly a great first step, but looking bigger picture is also key to financial health. So, figure out what your big savings concerns are: Do you need to reserve money for a down payment for a house? Are you overdue for an emergency fund? Are you planning for tuition costs? Depending on your income and your budget, you may want to pick one of these to focus on, or perhaps you can put effort into saving for all three. To get a sense of what it will take to save enough, use this savings goal calculator to run the numbers.
A great way to save on a longer-term basis is to open a money market account or a certificate of deposit. These products tend to offer better interest rates than savings accounts. On the other hand, you need a higher opening balance, and they restrict your access to the funds, which makes them more suitable for long-term savings.
In anticipation of the new year, start by opening the right savings accounts for your needs. You can apply for savings accounts, money markets and CDs online in just minutes. If you have any questions about these products, reach out to a Citizens Bank customer care representative at 1-877-360-2472.