Why You Need Them, and How to Stick to Them
It’s easy to fall into spending habits. What’s NOT easy is getting into saving habits.
Most people consider savings as something they’ll take out during retirement, but this isn’t true. A stash of money stored away in a separate account could save you during an emergency, or help you afford a large purchase like a home or car (and thus save you money on interest payments.)
Saving requires foresight. It requires discipline. But even if you’re the most in-the-moment, impulsive buyer to ever walk the earth, you can still save for the future as long as you have some clear savings goals in place.
So how do you implement savings goals? Easy! And UAE Money Expert is here to show you exactly how to do it.
First Step: Know What You’re Saving For
This is an easy one. You can’t have solid savings goals if you don’t know what you’re saving for. Is this stash of money you’re saving for emergencies? Are you saving for a down payment on a home? A wedding ring? Maybe you want to start an “escape” fund that will allow you to travel for a few months. Even if you’re not ready to settle down and start a family, you can still find something that is worth saving for. And once you’ve figured it out, name your account something that reminds you of it, like “Escape Fund” or “Best Honeymoon Ever.”
Lastly, start small, and go from there. You’ll be addicted once you see how much money you have in that account after just a few months.
Second Step: Have a Set Amount You Need to Save
Clarity is important when you’re saving up. You want a specific figure that you can work towards. Once you’ve identified it, the number acts like a mental magnet, pulling you inevitably toward your savings goal.
Note that saving around 5% to 10% of your monthly income is something we really push our readers to do, at least at first. That mark will move you steadily toward your goal, without making you feel like you have no money at the end of the month.
Third Step: Plot Out Miniature Savings Goals to Meet Your Big Savings Goal
What we mean here is that you want to add a certain amount of money to your stockpiled savings account on a set schedule or timeline. Maybe you’ll add in some money every two weeks, or every month. The important thing is you use smaller cash goals in a set schedule. That way, you can visualize how long it will take you to meet your big savings goal.
Remember: Make these miniature savings goals attainable! If you try to put in too much every month, you may have to take money out of that account to pay your bills. If you do this once, it almost frees you to do it all the time.
Fourth Step: Make It Completely Automated
The less hassle you have in moving this money into where it needs to be, the better. Instead of transferring the money yourself every week/month, you can set up an automated transfer with your bank. The money is quietly and securely withdrawn from your primary account without you having to do a thing!
Tip: You can also have your employer or your bank deposit a specific amount into an account you designate. Most are happy to do so!
Fifth Step: Know Your Savings Account
Not all savings accounts are created equal. Some offer interest rates that are quite good, which in turn will help you meet your savings goals faster. Given, you’ll need time for the interest to really kick in and start working for you. If you have a smaller monetary goal you’re saving for, a standard instant access savings account could do the trick.
If you’d like to learn more about which savings account is right for you, the UAE Money Expert is here to help you out!
Click here to use our savings calculator to assist you further in reaching your savings goals. It will help you calculate what you can afford and how long it will take you to reach your goal.
If you would like to review your saving options please complete the below form and an Expert will be in touch