If you’ve looked extensively at your financial options, you’ll know that building a savings portfolio is more than just putting extra money in a bank account. In fact, putting aside cash into a regular savings plan is probably the least you can do for your money.
Your available options become even more vital when you are setting specific goals for a particular time, such as having a certain amount saved up by the time you reach 40. Whatever savings plan you have going now, realize that nothing is guaranteed. You can encounter difficulties that may require you to skip putting aside money or, even worse, borrow from that which you have saved. Interest rates can go down, effectively skewing your target numbers. Regardless of what happens, the important thing is to re-assess your situation and act accordingly.
So what are the most important strategies to ensure that you reach your savings target despite regardless of difficulties that may come your way?
Put Money Into Your Savings Regularly
Possibly the hardest part, but also the most important, is to put aside money regularly into your savings. Different financial advisors will have their own take on how much you should allocate but they all echo the same sentiment: the more you put in, the better your chances of succeeding.
Exercise some discipline and make depositing into your savings the first financial transaction from every paycheck you receive. If you can invest in a retirement plan with your current job, you can have them take out a percentage of your salary every month, ensuring that a good portion of your income is saved. It’s really easy to save money when it doesn’t even touch your hands.
Enlist the help of a parent, spouse or good friend if you’re having trouble building up your savings. Many other people can do it on relatively moderate incomes – why can’t you?
For the purpose of growing your savings, look for investments that are steady and secure, such as established stocks. Don’t allow yourself to be talked into high-risk ventures, regardless of the potential reward. Your savings deserve security – don’t put them on a gamble.
If an investment is proving to be wrong, don’t delude yourself that it will prove itself in the long run. Your risks get higher the longer you drag it out. Accept the miscalculation, cut your losses and move your money somewhere else.
Make sure you watch out for policy changes in the institutions where you decided to keep your money. Banks can add ridiculous fees or change interest rates on your savings account - make sure you’re on top of what’s happening and take necessary steps if you find yourself in the receiving end of a bad rule change.
In the same way that company policies can potentially affect you, so will certain amendments to existing tax laws. Lower taxes on particular types of investment, for instance, might make them better options than what you currently have on your portfolio. Keep your eyes and ears open to opportunity and you might increase your chances for success.
What You Do Today
Savings are all about what you do today. Don’t count on getting a better job next year or making more money next month. Put as much money on your savings as you can right now. Study your options and take the appropriate action today. Putting it off for whatever reason – such as when the kids are older or when you move to a new city – will do nothing but lessen your chances of having a successful savings plan.
If you need help, don’t be afraid to seek it. Whether you end up listening to counsel from a trusted family member or a reputable financial planner, make sure to clear up any questions in your mind and bring up any concerns. The more you are aware of your options, the better-informed your decisions will be.