Tips for setting savings goals

So, you’re going to set some savings goals – and get or do some of the things you’ve been wanting to? Nice work! You’ve probably heard that goals should be SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound) in order for you to have a better chance of achieving them. While this is helpful, here are some other tips for setting savings goals.

Prioritise your goals

Want concert tix, a new skateboard, a car? Chances are you’re going to have a hard time saving for all of these things at once. It may be helpful to pick the thing you want the most or to have the soonest and focus on that. Once you’ve done that you can start on the next thing. For example:

"I do want a new skateboard, but I don’t want to miss out on the concert, so the concert wins. I can save for the skateboard after that!"

Know how much you need to save

It can be helpful to know exactly how much money you need to save. This helps you work out a savings plan and gives you a solid end goal. For example:

"Concert tix cost $128 + need to allow $12 for the bus/train so all up I’m looking at $140 dollarydoos."

Know how much you can save each week

If you have a regular income from a job or pocket money this makes it easier to know how much you can afford to save. Work out how much of what you earn you can set aside for your savings goal. If your income is more irregular, it can help to work out how much you want to save each week and then work out how to get that. For example:

"I get $100 each week from work and pocket money. I need to pay for my phone, I want some money for school lunches, the movies and other stuff - I can probably save $5 each week?"

Work out a savings plan

If you know how much you need to save to reach your goal and you know how much you can save each week, you can work out a savings plan. Just divide the amount you need by what you can save each week and you can work out how many weeks it will take for you to save enough. For example:

$140 ÷ $5 = 28 weeks

Check the timing – does it work for you?

So you can buy your concert tix in 28 weeks? Perfect… except the concert tickets go on sale in 10 weeks. When you want to save a certain amount of money by a specific time, all you need to do is divide the amount you need by the number of weeks you have and you will know how much you need to save each week. If that amount fits in with what you get each week, awesome – thumbs up. If it doesn’t, you’re going to have to work out how you can change your spending or earn some extra cash over the next 12 weeks. For example:

"$140 ÷ 10 weeks = $14 each week. Ok... phone is non-negotiable, might have to skip a movie and take-out for a bit… so worth it!"

Track your savings

Rather than setting your goal and then forgetting about it, it’s important to keep track of how you’re travelling. For two reasons – keeping track can help you stay focused and keep your goal top of mind and also, if for some unexpected reason you fall behind in your savings you might be able to adjust your savings plan so you still reach your goal on time.

When you get to actually spending the money you have saved up, consider shopping around to make sure you’re getting the best price on whatever it is you want to buy. You could use the time you are saving to do some detective work on SMART goals:

SET SMART GOALS (says everyone, always)

S = Specific (include the detail)

M = Measurable (have some way to track how you’re going)

A = Achievable (it helps if your goal is actually possible to reach)

R = Relevant (is it something you really want)

T = Time (set a time limit)

Get started mapping out your budget now.

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This article has been prepared by IMB Bank and contains general information only. It is not intended to be relied on as advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal,  financial, taxation or other professional advice before you make any decisions about your business. Consider the relevant Terms and Conditions or Product Disclosure Statement and Target Market Determination available here before deciding whether to acquire any products or services offered by IMB Bank. Lending criteria, terms and conditions, fees and charges apply to IMB loan products.