Whether you're brand-new to the idea of saving and investing, or you're simply looking fine-tune your plan, the savings goal calculator can help you construct the best strategy to grow your wealth.
With better savings, you'll be ready to meet financial goals like paying off your student loans, purchasing property, and even retiring. For some tips and tricks to help you along the way, take a look at our FAQ below.
It's important to remember that the best strategy to grow your wealth you will depend on your unique circumstances.
Some people may need to pay off credit card debt before they begin investing, while others may prefer to pay off debt and save at the same time.
Regardless, there are a few things everyone can do to conquer their saving goals.
Once you have a goal, you'll need to figure out how you can get there. A savings goal calculator can do the hard work for you.
Start by working out how much you can afford to save each month. Put this number in the Savings Goal Calculator, along with the interest rate of your saving or investment account and the inflation rate.
You'll then receive a savings plan which will show you how to go about reaching your savings goal. It will also illustrate how your current savings strategy stacks up.
This can also help you feel motivated since you can play with the numbers and see how much sooner you would reach your goals by increasing or decreasing the amount you save.
Times are tough, particularly for millennials- many of whom who are paying off student loans and feel that they've been priced out of the housing market. Even if you aren't a millennial, it can be tempting to spend everything you make.
But there's a special kind of feeling that comes with having some savings. You'll know that if disaster strikes, you can handle it without needing to borrow from friends, family, or the bank. This is great for self-confidence.
Saving can be addicting- it's fun seeing the money in your savings account increase. While you may not be ready to think about saving for retirement, it simply makes sense to use the power of compound interest by starting as early as you can.
If you've always wanted to own your own home, saving for a down payment is crucial. The higher your down payment, the further your negotiating power will go.
You'll get better interest rates, and may be able to buy a better home or live in a better neighborhood. You'll also have more affordable mortgage payments.
Most of us know we should be saving. But when you're choosing between dinner and drinks with friends or banking that money in an unnamed savings account, you're probably going to choose to have fun.
People who write down and can vividly describe their goals are 1.2 to 1.4 times more likely to achieve them. When you take time to write things down, they're more likely to be remembered.
You're also able to review them regularly- particularly if you have them somewhere easy to see.
Think about why you'd like to save and invest. Maybe you watched your grandparents barely get by on social security in their retirement.
Perhaps you have always wanted a stylish condo in the heart of the city. Or maybe you've been dreaming of a round-the-world trip without going into credit card debt.
Write it down, and make a list of all of the reasons why you want to meet this goal. This will help keep you accountable and get you excited about saving and investing.
If you can, update the name of your savings account to reflect your new goal e.g. "Deposit for My First Home."
The next step is to look at your current budget.
Where are you spending your money? Are there any places you can cut back?
This doesn't mean you have to live a life of complete deprivation. Instead, give yourself a certain amount of entertainment or shopping money each week, and make sure you don't spend more than this.
Since everyone's finances are different, this can be a difficult question to answer. Instead, think about saving a certain percentage of your income each month.
Most financial experts recommend saving at least 20% of your income each month. Here's how it should usually break down:
Ideally, this should be 10-15% of your income. If your boss matches your contributions, you can accomplish a saving rate of 10% simply by saving 5% yourself.
An emergency fund should cover approximately 6 months of living expenses. Calculate how much you need to pay your bills each month.
Divide this number in half, and aim to save this amount monthly. Within a year you'll have a 6-month emergency fund.
If you've paid off your credit cards, it's a great time to start investing. Start small with 5% of your income each month.
You can keep things simple by investing in bonds and stocks. Just make sure that you have enough savings so you can lock in your investment money for the long-term.
The key is to get started as soon as you can. Make compounding interest work for you. Even if you start small, you'll become motivated to change your lifestyle so you can meet your saving goals.
The above investment strategy is all about ensuring you have enough savings to keep you going in the short term if a financial crisis hits. But it also great to meet your long-term goals so you'll be set for life's milestones and retirement.