Having a solid savings plan is one of the best things you can do to prepare for your future. Not only will it come in handy in case of an emergency (accident, laid off, etc) but will also help you come retirement time. Setting up a weekly savings plan is easy to do, and can have great long term benefits if done correctly. Below are some simple steps you can follow to start setting up your savings plan today.
- Find Your Purpose – Why are you setting up this savings plan? Is it just so you have some extra money for a vacation next summer? Or are you looking to put some money away for your child’s future education costs. Knowing the reason behind your savings plan will help you to determine how best to manage it
- Set A Goal and Choose A Method – Once you know the reason for your savings plan, you can start to map it out. First you need to decide just how much you are trying to save up. Don’t set the bar too low, or you won’t really be changing much in your life. You also don’t want to set the bar too high or it could be unreachable. Take some time to think it over and come up with an exact amount of money you want to save up. For example, let’s say you want some extra spending money for next year’s vacation. The amount you come up with is €1,000, and you are giving yourself 10 months to do it. That means all you have to do is put €100 away each month, or roughly €25 each week, in order to reach your goal. For something like this you can probably use a separate savings account. For anything larger, you will probably want to look into different investment options.
- Get Going – Once you have your goal and your method, it’s time to put it into action. Using our example above, this means taking €25 out of your pay each week and adding it into your savings account. This is a pretty reasonable amount that you can probably manage. Make sure you are putting it into a separate account so that you are not tempted to touch it throughout the year. If you come across any extra money throughout the year (collecting change, extra work, etc.), feel free to add it into your account.
- Set It To Autopilot – The best method for saving is if you don’t have to think about it too often. By setting up automatic transfers you can have your weekly savings amount added right to your account from your checking account. This way you can forget about it, and when it comes time to use your savings money, it will be right there waiting for you.
With these easy to follow steps you should have no problem setting up an effective savings plan. A savings plan can make a lot of things in life a lot easier. Don’t just try and afford things when they come up. Plan ahead by putting a little bit of money towards them each week. When it comes time to pay, you’ll be very happy to know you have this account waiting there for you.