How to save for big financial goals
One of the hardest things about saving money is getting started, and the bigger the goal, the more intimidating it might be to start, but with the right plan, anything is possible. That’s why it’s important to develop a realistic strategy that’s simple to follow and stick to. Once you’ve got everything in place, you’ll be able to effectively save for your goals, no matter their size.
Here are our 5 top tips to help you get started on a big financial goal:
Plan for a specific goal
Whether you are saving up for retirement, education, an emergency fund or any other major financial goal, you need to know what you’re working towards. This will determine the actions you need to take, and the clearer you are on the goal, the clearer the path you can create towards it.
Once you know what you’re saving for, you need to be realistic about how much you can save and what the timeframe is for achieving it. Creating a savings plan can help you outline the steps and necessary actions to getting to your goal.
Re-evaluate your spending habits
Saving more means having to spend less elsewhere, and by reviewing what you spend your money on (from household expenses to entertainment), you can be intentional about the changes necessary to free up extra cash. Use the Money Movements add-on on your Banking App to get a full view of your income and expenses to help you manage your money effectively.
Draw up a budget
Budgeting isn’t glamorous, but it is effective if you stick to it. Saving for a bigger goal requires a longer commitment and consistent contribution, and a budget will help you not only control your spending but also see how you can fit your savings commitment into your finances.
Need help drawing up a budget?
Make sure you have the right type of account
Certain savings and investment accounts will be better suited for your needs. If you’re saving for a long-term goal, such as retirement, consider a retirement annuity, which is an account specifically for that. If it’s a shorter-term goal where you need access to the money, then a Fixed Deposit investment account or a PureSave account could be more effective. When you’re parking your money, ask yourself:
- How will this account help me reach my goal?
- How long will my cash be stashed away?
- Do I need access to this money?
- Do I qualify for this account?
Use our Savings and Investment product filter to do your research on which accounts are suited to achieving your goals.
Set up a debit order for your savings
It can be tempting to spend any extra money on something else during the month, so to avoid this, automate the process of transferring your savings into your savings account as soon as you get paid by setting up a debit order. That way, it’s less tempting to spend the money, but you’ll also know that it’s been taken care of and that you won’t have to ‘find’ the money in your budget later.
Need more guidance on how to make your goal a reality? Speak to one of our financial planners about your future, today.