An effective savings plan can help you meet your financial goals, pay off your debt, and make life-changing purchases. When you want to start saving, it can be difficult to know where to start. Throughout this blog, we’ll share budgeting and savings tips for beginners, suitable for just about any budget.
Set a Savings Goal
Before you develop a savings plan, set a savings goal. Think about the following questions as you set your goal:
- Why are you saving money? (Is it for a big purchase? To pay off debt? For a safety net?)
- How much money do you need to save?
- How will you save money?
Once you think about these core questions, you’ll begin to have a better idea of how to move forward and develop a savings plan.
Set SMART Goals
When setting a financial goal or any type of goal, try following the SMART method, where each letter represents a different aspect of your goal:
- S: Specific. How much money do you want to save? Set a specific amount.
- M: Measurable. Track and measure progress—for instance, with a savings account.
- A: Attainable. Clear obstacles and gain the tools you need to make your goal attainable.
- R: Realistic. Set a goal you’re able to meet based on your specific financial situation.
- T: Timely. Aim to achieve your goal within a specific time frame, such as within a year.
An example of a SMART goal would be: I want to save $5,000 in a year to pay off a loan. I’ll measure this with a savings account. To make my goal attainable, I’m going to work with a bank to get the tools I need. This is a realistic goal for me, as I can afford to save $100 weekly.
How To Create Simple Savings Plans
Setting a savings plan doesn’t require you to be a financial expert, and you don’t have to have a lot of money to start. There are plenty of budget-friendly savings plans suitable for beginners. Even if you can only aim to save a few hundred dollars in a year, that’s substantially more than zero.
Set a Monthly or Weekly Savings Goal
The Consumer Financial Protection Bureau suggests a simple method to set a savings goal:
- Determine how much money you need to save (and remember your “why”).
- Set a timeline based on weeks or months (ex: one year, 12 months, or 52 weeks).
- Divide the total amount of money by the number of weeks or months you have.
- Save the calculated amount with weekly or monthly goals.
For example, let’s say you want to save $10,000 in a year for your wedding. You’ll divide $10,000 by 12 months for a monthly savings goal of around $834. You could also divide your savings goal ($10,000) by 52 (the number of weeks in a year) for a weekly goal of around $193.
How To Reduce Spending To Meet Your Goals
The difficult part of saving money is cutting your spending to meet your financial goals. Look for lowering spending on unnecessary expenses. Track your spending using online banking, a spending tracker app, or another method so you know exactly where your money is going.
Wondering how to save money on a budget? Try these ways to cut spending:
- Cut down on dinners out and try out fun meal prep recipes instead.
- Use a subscription tracker to find monthly subscriptions you’re paying for but don’t use.
- Switch to home workouts and stop paying for an expensive gym membership.
- Buy secondhand. Check out thrift stores and Facebook marketplace for clothing, furniture, décor, and more.
Use Landmark’s Banking Tools To Manage Savings
Saving money can be challenging, so don’t try to do it alone. Here at Landmark, we’re ready to give you the tools you need to meet your financial goals. We’ll make keeping track of your spending simple with our online banking and mobile banking tools for checking and savings accounts.
With the help of our savings account options, you’ll hit your savings goals in no time. If you don’t have a lot of money to start your savings account with, our Smart Savings Account is a great option, only requiring an opening balance of $50. Find your nearest Landmark bank branch to get started.