As we near the end of the year, this is a great time to reflect on the current year, and also prepare for the next year. If you haven’t done do already, assess your savings goals for 2015 and ask yourself the following questions:
Did I make realistic goals? If you set out to save $10,000 for 2015 you would have to save $833 per month. Now depending on your income this may be feasible for some individuals as all other expenses were paid and strict budget was followed. However, for most this is a pretty aggressive approach. Instead set out to make small realistic goals and be specific. For example, you can set out to save at least $100 monthly or $1200 annually. If you are able to add more, you have that option.
Did I accomplish my goals? If you accomplished a specific savings goal, congratulations. You are on the right path of financial towards reaching financial wealth. If you did not completely accomplish your goal, it is okay. You can start again. Continue to reach toward any current goals.
Do I have the best savings option? Whether you have a basic savings account at a financial institution or credit union, are you receiving the best interest rate based on your savings goals? Do you need to take a more aggressive approach to your savings such as opening a Certificate of Deposit (CD), Money Market Account (MMA), Investment Retirement Accounts (IRA), etc.? A CD allows you to deposit funds into a bank for a specified term and you cannot access the funds until the term is over. If you want to save for a specific goal such as down payment on a house or child’s college tuition and you do not want to easily access the funds, then a CD may be your option. An MMA allows you to have the benefit of a savings account that has limited checking capabilities. If you are saving for an emergency fund, this may be an option when you need to access your funds right away. An IRA is an option when you want to have additional resources for retirement outside of what your employer may offer with 401 K. All three options mentioned above are designed with strict guidelines which will help you be more disciplined with your savings. Make sure you research to find out which works best for your goals.
What can I do for the New Year? Do I have new goals? Now is the time to plan for any new savings goals you would like to accomplish. Perhaps you want to increase savings deposit amounts for your emergency fund or you are planning a vacation. Write down all of your savings goals and set specific amounts to your budget. Also, you can open additional savings accounts.
Whether you are already saving or just starting, take the New Year 2016 as an opportunity to make a change in your life.
Tonisha Brown is a wife and mother, and the founder of Living in Abundance where she believes in bridging families together through fitness and finance.