Saving for a major life event such as getting married, buying a home, or starting a family are all daunting things to think about. Financially preparing for these or any other future event is key to accomplishing those specific goals without breaking the bank. Here’s how you can get there through goal setting, budgeting and with a little time on your side.
Identify Current Expenses
Do you know where your money goes? The first step in planning for a major life event is to review your current income and expenses to identify areas of potential savings. You can start with an interactive budget worksheet at Travis Credit Union that helps you determine if you have a budget surplus or a deficit.
Set a savings goal
Next, find out how much you need to save to achieve your goal. Begin by researching the average cost of the event and then add in any additional or indirect expenses that might occur. For example, you discover that some invited relatives can’t afford to make the trip to your event but you decide to pay to fly them out. That’s an indirect expense that could substantially increase the cost of your event. Your savings goal should have a cushion for unforeseen expenses.
Once you know how much you need to save, determine how much time you have to save for it. Long-term savings goals include saving for college and buying a home, while short-term goals include saving for a down payment on a car or for a trip. In every case, it’s always best to start saving as early as possible to maximize the savings benefits for your target goals.
Divide your total savings goal by the months you have before the event. This is your target monthly savings amount. Based on your budget, do you have enough funds available to meet this savings plan? If not, it’s time to review your discretionary expenses and identify areas where you can reallocate your money. TCU has savings calculators to help you plan.
First, review monthly expenses such as subscriptions services, food and entertainment to see where you can cut back or do without. Canceling subscriptions, cutting back on dining out and even reducing the number times you get $5 coffee will increase the amount of money you have available. If that is not enough to support your savings plan, consider taking on a side gig to help reach your target goal.
Keep Savings in Separate Account
It is a good idea to establish a separate savings account as you accumulate funds for your savings goal to track your progress and to keep that money sacred. A great way to save is to have money automatically deposited into your savings account through Direct Deposit. TCU Target Savings account is specifically designed to help you reach your savings goal.
Review Your Budget Often
Some life events, such as weddings and vacations, will have a period of building up savings followed by a flurry of expenses incurred over a short period of time. Other goals that you have saved for, such as a new baby, will continue to carry expenses for many years to come. Remember to review your budget often and move money to where you need to save most.
Once you have accomplished your initial goal, look to the next and keep building your savings habit. Travis can help with our Jumpstart Money Market Account, which earns you the highest interest for the lowest savings balances. You can also learn more about money savings products and services from TCU by viewing our Smart Money Matters e‑newsletter.
To learn more about how Travis Credit Union can help you on your path to plan, save, spend and borrow, visit traviscu.org/financialwellness.