Why It’s Important to Set Savings Goals

We all have big financial dreams. Maybe yours is buying a new car, going on vacation, buying a home, or sending kids to college. These are admirable goals, but they’re not cheap. Setting a savings goal is essential to making your most expensive financial dreams a reality.

You Can’t Achieve a Goal You Never Set

Let’s say you want a new car, as many of us do. The first step in reaching this, like other financial goals, is getting specific with what you’re trying to achieve and how much you want to save. Find the cost of an affordable car you’re considering, and set that as a savings goal.

Savings goals can help you achieve financial goals. Little kids often save up their allowance to buy toys. While you likely want something more expensive than a toy, the concept of saving is the same. Settle on a realistic number you wish to chase to set yourself up for savings success. 

Goals Can Help You Know How Much to Save

It can be discouraging to think about saving up enough for a down payment on a new home. But reaching that goal may be more realistic than you think. When you budget and save studiously, those bigger goals become attainable.

For every goal on your list, do a little research on how much you need to save. Giving yourself a clear finish line encourages you to start and keep on saving. When you use a savings app1 to track your progress, you can quickly check your progress and know you’re making intelligent steps to keep your savings trend going.

Set Guidelines for Every Savings Goal

Like the car example above, setting specific goals and guidelines is helpful with any goal. The more specific you can be about your goal, the more likely you will succeed.

Here’s another example to show how it works. Let’s say you want to save up for a new bike. You know that the bike you want costs $600, so make that your savings goal.

But when do you want to get that bike? If you’re saving up to get that bike in six months, you could implement a savings plan to put away $100 per month, perhaps $50 per paycheck, and you’ll be on schedule. You can lower your savings rate to $50 per month to save the same amount over a year.

If you have five financial goals, you can set up a plan to reach all of them by your planned due date. Be sure to put those savings goals in your budget to avoid accidentally spending the money elsewhere.

Tip: Listen to our podcast on how to get a raise if you don’t earn enough to meet your monthly savings target.

How Payactiv Can Help

At Payactiv, we built our new and improved Goal-Based Savings tool with busy savers in mind. When you apply for a Payactiv Visa® Card*, you can access our automatic goal-saving tool and set money aside for anything you want. Our SmartSave feature makes intelligent insights into how much is safe to save from each paycheck**.

It’s Okay to Start Small with Savings

When saving for a home, it’s best to save up at least 20% of the purchase price as a down payment. If you’re trying to save up to $50,000, reaching your goal may feel impossible when putting in a small amount. But that’s far from the case. Every dollar and cent counts, and getting into a regular savings habit can put your finances on track to thrive.

Start by saving $1, $5, or $10 per pay period. You can always grow your savings from there, but you probably won’t unless you take that first step to get started.

While we may not all be future millionaires or billionaires, we can use our money to live the best lifestyle possible. When you get on track for other savings goals, you’re setting yourself up to live the life you’ve earned.