8 Tips to Help You Reach Your Saving Goals

Like starting any new habit, saving may not come naturally.

When you’re strapped for cash, it may be hard to imagine setting aside a specific dollar amount or percentage of your income to save, but it’s still important to make this a part of your regular financial routine.

Because life is unpredictable, savings give households a financial buffer from emergencies and unexpected expenses. When families don’t or can’t save, they’re more likely to take on credit card debt when a financial emergency happens, according to the Federal Reserve Report on the Economic Well-Being of U.S. Households in 2019.

Personal savings can also give peace of mind when it comes to enjoying daily life.

“When there is money set aside for activities, trips, meals, and friends, you allow yourself to enjoy those activities without feeling like a financial burden,” says Dorothy Nuckols, a family and consumer sciences educator with the University of Maryland Extension. 

So how can you encourage yourself to save money? The following steps can help you jumpstart your savings and keep you motivated to reach your financial goals.

No. 1: Know where your money is going

If you’re not already using a formal budget, track your living expenses for one to three months to gain a better understanding of your spending patterns. Apps such as Mint, YNAB, and EveryDollar can help you complete this step, which may be preferred if you primarily use debit or credit cards, but you can also use a pen and notebook if you use cash for most of your purchases.

“When you think carefully about spending, it becomes easier to find patterns of spending that can be changed to more successfully reach saving goals,” Nuckols says.

Nuckols prefers to use the envelope budgeting method to track her spending. With this system, she puts cash for budget items like groceries, household goods, and clothing in envelopes.

No. 2: Make savings part of your budget

One of the most common pitfalls when it comes to saving is not including it as an essential part of your budget.

“If your savings plan is just to save what is left over at the end of the month, you frequently end up with little or nothing saved,” Nuckols says.

When creating your budget, account for every dollar of income, including savings. When saving is planned and purposeful, you’re more likely to find success, even if you are on a tight budget and you’re only saving $20 a month. 

No. 3: Pay yourself first

If you usually don’t have money left over at the end of the month, paying yourself first can be a hard practice to kickstart. Instead of allowing savings to drop to the bottom of your financial priorities, push it to the top of the list and set aside a designated amount of money up front.

“If you pay yourself first and then use whatever is left for your monthly expenses, you can start building your savings,” says Carrie Johnson, Ph.D., an associate professor and extension specialist at North Dakota State University.

Saving can seem like a nonessential line item, but it’s just as important as paying your typical monthly expenses. 

No. 4: Start small

For those new to saving, aim for a goal that is achievable in a fairly short period of time.

Typically, setting a smaller goal of $200 can help keep you motivated. Once you’ve saved that much, set another goal of having $400 in your account.

“Having three to six months of household expenses in an emergency savings account is typically advised, however that can seem overwhelming to people and they give up,” Johnson says.

When setting long-term savings goals, make incremental, smaller goals to stay motivated as you progress.

Balancing saving for short-term goals (such as a down payment for a new car) and long-term goals (such as retirement savings) can be a challenge. In her research, Patti Fisher, Ph.D., a professor of consumer sciences at Virginia Tech, has found that people who have a long-term savings focus are more likely to save than those who focus on the short term.

No. 5: Celebrate your milestones

Your ultimate goal may be to have an emergency fund of $600, but depending on your financial situation and income, this goal may take several months to achieve. Break it down into saving $50 per month. Once you reach a milestone of saving $100 or $200, celebrate with something small to keep yourself going.

“Like climbing a long hill, don’t focus on how much further you have to go,” Nuckols says. “Focus on reaching the next small milestone and then the next until you get where you want to go.” 

No. 6: Take advantage of automatic deposits

Initiating an automatic transfer from your checking account to your savings account can help you avoid having to think about setting money aside.

On payday, designate an amount to automatically withdraw from your bank account for savings, and use the rest of your income for regular spending as planned. This way, at the end of the month, you’ll already have set aside money for your savings.

“Automatic deposits into a saving or retirement account can prevent consumers from overspending without realizing it,” Fisher says.

When you put your savings in a designated savings account, it also has the opportunity to earn interest. Not all types of accounts are created equal, and they all have varying interest rates, so shop around to find an account that works for your needs.  

No. 7: Find a goal that hits home

One of the best ways to stay motivated is to stay focused on the “why” behind your savings.

“If you’re new to saving, I find it helps to think about what motivates you as well as what your goal is,” Fisher says.

It’s important that your savings goals align with your priorities. Often these goals are ones that will improve your quality of life by reducing your financial stress. For example, if you spend a lot on medical care, a medical savings account may make the most sense. If your child’s college education and limiting the need for student loans are important to you, start a 529 savings account.

For longer-term savings, you can put money into a money market account, certificate of deposit, mutual fund, or invest it in the stock market.

“Setting goals can help us create a vision of where we want to get, and once we have that vision, we’re better able to figure out what we need to do to get there,” Fisher says.

Maybe your savings goal is to simply feel financially secure. For some people, this means having a certain dollar amount in savings. Reflect on how much you’d need in your account to achieve this goal and break it into smaller goals.

No. 8: Get everyone involved

Discuss your savings goals with your household. This can unify everyone and help you stay motivated.

“If you have competing goals, it’ll be more difficult to reach your savings goals,” Johnson says.

Sharing your savings goals with your household can also help keep you accountable on your savings journey.