Our Savings Plan Spreadsheet helps you reach your goals
Being able to pay for the things you want in life without taking on too much debt is one of the best benefits of careful financial planning. And it's not just a perk of having a large income. Savings plans can help anyone reach their financial goals. Here's how to create your own savings plan.
What are your savings goals?
Make a list of all the things you want to save for. This includes everything from a weekend getaway to a new home. Make it as broad as possible at first, then narrow it down to the items you want to save for currently. For some people, that may be one thing, for others, ten. The more savings goals you have, the more a savings plan will help you stay on track to reach them.
Add up the cost
The next step is figuring out how much each of your goals is going to cost. For less expensive goals, include the full cost. For more expensive items that you plan to pay for in part with a loan, such as a car or house, determine the down payment you want to save.
Decide how long to save for each goal
How long will it take to achieve your goals? That's your savings window, and it will be different for each of your goals. The time frame will also determine how you formulate your savings plan. For goals that are a year or two away, keep your savings in a low-risk investment that protects your money. For longer-term goals, you may consider higher-risk investments since your longer savings window will give you time to recover from fluctuations in the market. However, even for these, the closer you get to reaching your goal, the more of your savings you should transfer to lower-risk investments.
Figure out your total monthly savings target
For each of your goals, you'll need to save a specific amount each month in order to reach them by your target date. Use our Savings Plan Worksheet to figure that out. For goals less than a few years away, use the top section of the worksheet to enter how many months you plan to save. For longer-term goals, use the lower half to your savings window in years. Either way, the Savings Plan Worksheet will automatically calculate how much you need to save each month.
Compare your monthly target to your current savings. Are you saving enough to reach all your goals? If not, here are two steps you can take to fix your savings plan:
- Increase savings: To reach all your goals you will need to cut your monthly expenses. A budget planner can help you find ways to trim your spending so you have more money each month for savings.
- Revise goals: Identify your savings goals ones that are less important or that you can postpone. Then revise your Savings Plan Worksheet to allocate less money per month to those goals. The worksheet makes it easy to revise your savings targets until you find an amount that fits your budget.
Update the Savings Plan Worksheet whenever your savings goals or budget changes, and review it regularly to make sure you stay on target. Watching your dreams get ever closer will help motivate you to keep saving.
What's next? What are your top financial concerns?