Retiring early, losing weight, and even starting a business—they all take planning to turn those dreams into reality. Each one requires that you set a series of realistic goals. It can be tough to know where to start, but you don’t need a finance or accounting degree to improve your financial wellness. It starts with making wise choices with your money. Follow these ten tips to better set and reach savings goals. The earlier you start, the more time you’ll have to enjoy the rewards of smart money management.
Tip #1: Start with one, small goal
Success breeds success. When you succeed with one small goal, you’ll gain the confidence needed to set and achieve your next financial milestone. Make each new goal more challenging than the last. And, by doing so, you'll be on a faster track toward achieving your goals. encourage yourself to move even closer to your savings. For example, one modest goal to start with could be to pay off one of your credit cards within the next six months.
Tip #2: Create a monthly spending plan—and stick to it!
A spending plan serves as the foundation for most fiscally-fit individuals and families. When income and expenses aren’t tracked on a regular basis, it can become too easy to spend more than you earn. Start by monitoring your current spending. Keep all your receipts for the next 30 days to see where your money is going, beyond your regular bills. Once you understand your spending habits, it’s easier to make adjustments to stay on track.
Tip #3: Try My-Fi, a finance management tool
Plans are only successful if you follow through. Keeping your financial information and goals spread across many platforms makes saving complicated. That’s where My-Fi can help. It's a finance tracker available available through HawaiiUSA's Online Banking and Mobile Banking.
Convenient and easy to use, My-Fi is great for finance management. Members can build budgets, track expenses, and set goals, all in one place. Need My-Fi for more? Use it for checking, savings, credit card, or even a 401(k) accounts. And, it's compatible with accounts from over 13,000 financial institutions.
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Tip #4: Cut costs where you can
Spend smarter to stay within budget. It sounds simple, but you'll need to practice self-restraint. By nixing one unnecessary expense, you can put the money you save toward your financial goals. What should you cut back on? Think about what you're trying to achieve and if purchasing this item will hold you back. With a defined goal in mind, it's easier to determine what's a priority and what can wait. Do yourself a favor - avoid purchases that don’t improve your financial health and wellness.
Tip #5: Consider a side hustle
To put your financial goals on the fast track, think about getting a second source of income, if possible. A "side hustle" can take many forms and can include being a part-time retail associate or math tutor. These opportunities can be temporary (or even seasonal). They may be worth exploring, especially when trying to reach a short-term goal. Another option to consider would be opening a small business to assist with a long-term goal.
Tip #6: Open a new savings account for each goal
Dedicate a savings account to a financial goal. If you already have a HawaiiUSA savings account, consider opening a Secondary Share account to keep tracking separate. One account can be focused on saving for a home down payment, a college fund, or even a baby (or grand-baby) on the way.
Having dedicated accounts for each savings goal helps keep tabs of your progress. It also allows you to see all the contributions you've made since opening the account. This can boost motivation and increases your chances for success. Don't forget to name your accounts with something relevant to your goals. That way, you're reminded of what you're aiming for every time you login.
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Tip #7: Make it automatic
After committing to your goals, leverage automation to take the work out of things. Setting up automatic distributions to your account(s) means you don't need to divvy up your money manually. Arranging automatic transfers removes the temptation of splurging on something you don't need. This saves you from yourself! No more convincing yourself that you can start saving again next month or that you'll catch up on it later.
HawaiiUSA automated services include Direct Deposit as well as Recurring Transfers, which can be configured from your Online Banking account.
Tip #8: Set SMART goals
SMART financial goals are Specific, Measurable, Achievable, Relevant, and Timely. You're more likely to reach the goals that contain each of these elements. SMART goals need realistic planning based on a spending plan and associated timeline. Remember: save SMART-er, not harder.
Tip #9: Build an emergency fund
An emergency fund is there for you in life's unexpected events and accidents. From car problems to ER visits to sewage leaks, issues like these can come with a big price tag. Without an emergency fund, it may be a struggle to pay for basic necessities. That's why it's important to start a "rainy day" fund as soon as you can. Although hard at first, put aside money each pay period to build your fund. We recommend saving up three to six months worth of living expenses so you're prepared, no matter what.
Tip #10: Treat yourself
What happens when you reach your aspirations? Creating worthwhile incentives for yourself can be a source of motivation. It's important to recognize a job well done. Decide how, or with what, you'll treat yourself for reaching a financial goal or milestone.
You may have made sacrifices along your journey, but each decision lead you to where you wanted to be. Acknowledge how far you've come and celebrate the wise decisions or tough calls you made. When you're ready to start again, apply the lessons you've learned to make saving for future goals even simpler.