Savings Goals: How To Set And Achieve Them (2024)

The best way to start saving money is to first have a goal in mind. Do you want to put money away for an emergency fund or retirement? Or perhaps you want to save for a down payment or dream vacation? Whatever your reasons, having a savings goal—and not losing sight of it—will help you reach it.

How To Set Savings Goals

One of the reasons people don’t reach their savings goals is because they’re unable to quantify them. To help you avoid that pitfall, here are some steps you can take to set a savings goal and succeed.

1. State your goal. Specify how much you want to save, and track your progress over time.
2. Determine where you’ll keep the account. Compare different types of savings accounts at multiple banks and credit unions. Look for one with a high interest rate, quality customer service and FDIC insurance.
3. Set a deadline. Setting a deadline can keep you motivated and help you stay on track while saving each month.
4. Calculate how much to save each month. Divide the total amount you want to save by the number of months until your deadline. If you want to save $12,000 for an emergency fund in 12 months, you’ll need to put away $1,000 per month to hit your goal. Check your budget to make sure your goal is realistic.

What Is a Good Savings Goal?

The average savings account balance in the U.S. is $4,500, but your goal depends on your own situation. A good savings goal is achievable within a reasonable time frame given your circ*mstances.

Some financial experts recommend putting aside three to six months’ worth of expenses. So if you typically spend $4,000 a month on necessities like rent, utilities and groceries, you might set a savings goal of $12,000 to $24,000. If that amount seems intimidating, you can start small—such as saving $1,000.

What Are the Different Kinds of Savings Goals?

Once you understand how to set and work toward a goal, consider creating different types of savings goals for yourself:

• Short-term goals: These are smaller targets that could be reached within a year. For example, you might save for a vacation, a new piece of furniture or a new laptop.
• Midterm goals: These goals require saving more money than short-term goals, so they may take anywhere from one to five years to achieve. For instance, you might save up for a new car or a down payment for a home.
• Long-term goals: These goals typically take more than five years to achieve because they require the most amount of money. Long-term goals include saving for retirement or your child’s college fund.

How To Reach Your Savings Goals

What do you do if you have multiple types of savings goals? Here are a few steps to help you reach them:

1. Check your budget. Figure out how much you can realistically put toward your savings goals each month.
2. Make adjustments. If you don’t have enough to put toward savings after paying your bills, you may need to change your goals. You may, for instance, adjust the timeline or update your priorities. You may also find places in your budget to trim expenses, freeing up money for your savings goals.
3. Set a schedule. Start putting money into your savings account on a regular basis, and don’t touch it until you’ve reached the goal.
4. Track your progress. Consider using a money-saving app to stay on top of your goals.
5. Consider increasing your income. Can you bring in extra money to put toward your savings goals and reach them faster?

How Long Does It Take To Reach a Savings Goal?

The time it takes to reach a savings goal depends on the person and the goal, so there’s no one right answer. Once you’ve identified your goals and set a timeline to achieve them, you’ll be able to determine how long saving for each goal will take.

Bottom Line

It’s never too late to set a savings goal. Start where you are and with what you have, and you’ll already be ahead of many Americans.