Five Simple Tricks to Juggle Your Saving Goals
Money is indeed the most powerful tool in the world. It can help you buy just about everything in life, except love, happiness, and pure emotions. But yes, it is difficult to prioritize saving as you might have multiple financial obligations. Another question that might spring up in your mind is which direction should you direct your saved money to? How and where to utilize your money? These are the reasons you might feel disoriented now and again. Can you really accomplish your saving goals? It solely depends on how you prioritize your different saving goals and how you juggle them. To start with, make a list, analyze, calculate, and evaluate things. All you need is a plan. That’s it. Here are some pithy tips to help you out:
List Your Priorities
Juggling multiple saving goals might be mind-boggling at times. Take a paper and write all of them down. Categorize each one of your objectives as ‘needs’ and ‘desires’. By doing this, you are giving a priority to all your needs, and at the same, your desires are also on the list. After retirement, you will need an emergency fund to fulfill your financial needs, and your earnings should be directed toward basic necessities such as food, clothing, and shelter – three things you would need after you retire. You might not feel their importance now, but nevertheless, these are your needs.
Prioritize On The Basis Of Urgency And Value
All your priorities or objectives might be racing against each other in your mind, and you might not be adept at juggling all of them at the same time. So, select your top or immediate needs according to their urgency and personal value. If your car is on the verge of breaking down, and you are in dire need of a new one, saving for a vacation wouldn’t be as important as buying a new vehicle. Likewise, going out on a family trip or a vacation has got a personal value if there hasn’t been one for several years. Similarly, renovating your home can take a backseat (considering the roof isn’t breaking down tomorrow). Got the drift?
If you are unable to measure the urgency of a particular objective, try to gauge, think about all the negative and the positive impacts that might affect your bank balance in cases of ‘you not responding’ and ‘you responding’ respectively. Taking a loan to purchase a car when you don’t need it or didn’t plan for it can hit the credit score hard in the face and hamper the chances of accomplishing the objectives. But yes, buying a new vehicle with savings can save you the cost of repairs.
Allot Time And Set Up Funds For Each
Choose one objective to work on first, set up a time frame, and put aside some money. It will be easier for you to accomplish it. For example, if your child is getting enrolled in college, you may just count the total years needed for him or her to graduate, calculate the total money needed for one year, and then analyze how much you can set aside now and how much you would need to save monthly or yearly. If it’s a vacation, the process is the same. You set up a time frame and a sinking fund. This way, you will have the experience to analyze how to save money for different goals.
Choose How To Juggle Your Goals
There’s no single perfect method to do it. But, definitely, you can categorize your needs or wants into ‘long-term’ and ‘short-term’. This will help you in analyzing how far you can save, how far your budget can be extended, and how much you need to save. By divvying up your monthly savings into small portions, you can carve out a budget for many goals at a time. This way, your basic needs can be ensured, and at the same time, you can save money for the future.
Put Your Money In The Right Place
Financial advisors often recommend distributing money to various accounts depending on how urgent the objective is. A high-generating savings account is a natural choice if one wishes to realize an objective sooner. Funds will be near your reach and provide you with short-term returns. Long-term savings should be utilized in stocks, mutual funds, and tax saving accounts.
Saving money might seem to be an uphill task. But with proper planning, analyzing and prioritizing, it’s not impossible.
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