Setting Goals Can Help Boost Your Savings

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The 9th annual America Saves Week will be celebrated Feb. 23-28.

MANHATTAN, Kan. – Wanting to buy a new car or house? Perhaps you have your eye on something smaller, such as a new camera, tablet or other electronic device. Maybe your family is planning ahead for retirement or college tuition for the children.

Many things we want in life require money, and Elizabeth Kiss, family resource management specialist for K-State Research and Extension, said thinking about those goals helps motivate people to save enough money to reach them.

“America Saves Week is a great opportunity to step back and take a look at what you are saving for, how much you have already accumulated, and how much more you’d like to save,” Kiss said. “Savings can be a challenge, but it can be easier if we set goals.”

America Saves Week is an annual event in its 9th year that brings awareness to organizations and individuals about examining their savings status, managing their savings and promoting good savings behavior. It will take place Feb. 23-28.
Be strategic and realistic

According to the America Saves Week website, most Americans are not saving enough for retirement, and many households do not have enough money saved for emergency expenses, such as a car or house repair.

Not having as much money set aside as we would like to have can add stress to our lives, Kiss said, so although saving can be difficult, try to start small. Many times after developing the habit of regularly setting money aside in a savings account, savers will find themselves to be less stressed and have more peace of mind.

In addition to starting small, Kiss provided the following tips for savers to be more strategic and realistic:
1. Picture the goal.

Put a picture of your goal on the refrigerator or a desk to bring that goal to the forefront of your mind.

“To be successful, you need to think about why you want to save,” Kiss said. “Visualize that why. Once you have the big picture, think about what makes sense for your situation and how you might add to your savings a little at a time to achieve it.”
2. Make your savings goal attainable.

Given your current spending, think about what you might be able to shift around to free up money to put toward the goal. Think about what is reasonable for you past your fixed expenses, and then set a deadline for when you plan to have enough saved to reach the goal.

“You can make your savings automated or automatic,” Kiss said. “For me, automatic is that on the first day of the month, I transfer the money to my savings account. I decided I wanted to be the one to do that, because it gives me a sense of accomplishment. Some people want to have the transfer set up so they don’t have to think about it, which is automated.”
3. Reduce debt to increase net worth.

Other than putting money aside and watching it grow, consider paying down debt, especially high-interest debt. Budgeting can help find ways to pay down debt while simultaneously saving for other goals.

“As the level of debt goes down, you pay less interest and you have freed up money to use to meet other goals,” Kiss said.
4. Monitor any spending leaks.

Some spending is required, such as rent or house payments, insurance, utilities and groceries for the home. Spending leaks are regular expenses for “nice to have” items made by habit. These are often small expenses of less than $10 that add up over time.

“It’s the eating out and small expenses such as going to the pop or vending machine that are spending leaks,” Kiss said. “Once in a while that is fine, or if you plan and budget for it, then it’s part of your spending plan. But, if you think about those habits, you may decide they don’t serve you as well and you’re ready to use that money for something else.”
5. Build an emergency fund.

Research has shown that fewer than half of Americans could come up with $2,000 within 30 days to meet an emergency, so if you don’t have $2,000 set aside to access fairly readily, an emergency fund might be a good savings goal.

“Families with at least $500 saved in an emergency fund are found to be better off financially,” Kiss said. “A little bit of savings adds up over time, so even a small savings goal is better than nothing.”
More information

Although America Saves Week brings awareness of savings behavior, the America Saves and Kansas Saves websites are available year-round to provide tips and support to consumers. Consumers can also use these websites to pledge to save and sign up to get savings tips through text messages.

Story By: Katie Allen

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