I reached my yearly savings goal! I think we can all attest that 2020 has been so tough, but despite everything that has happened this year, I remained consistent, disciplined and determined and it all paid off. This is a major accomplishment for me, and I am going to tell you how I did it. If you have a savings goal in mind, but are struggling to budget and save, keep reading.
This is the unofficial first step because I am sure that everyone has done this already, but if you haven’t, make sure you open a savings account!
First, I established a realistic savings goal for myself. Through research and speaking with some financial advisors, I learned that 20% of your income should go towards savings, so I set a savings goal of 20% of my income. After identifying my savings goal, I chose a chose a date that I wanted to reach that goal, which was the end of the year, or December 31, 2020 to be specific.
Secondly, I calculated how much I would need to put toward my savings every month in order to reach my goal by the end of the year.
Next, I set a budget plan by calculating my monthly bills and other expenses against my income and including the amount that I would need to put toward my savings to identify where I needed to cut back on spending.
Then, I set up a monthly recurring payment transfer to my savings account of the amount needed to reach my savings goal by the end of the year. I chose to do an automatic transfer to skip the trouble of manually transferring the amount each month. This also helped me to stay disciplined with my other expenses throughout this journey. However, I understand that unexpected emergencies happen, and some people don’t feel comfortable with an automatic payment each month.
During the pandemic, I found that I was actually spending less than before as a result of quarantining and limited ability to go places, so I was actually able to increase my monthly savings amount and reach my savings goal early.
Lastly, stay consistent, stay disciplined and stay determined!