Saving: It’s all about being SMART

GTE UniversitySaving begins with effective goals:

Specific

“I want to spend my entire spring break in New York.” NOT, “I want to do something fun over the summer.”

Measurable

“I need $210 for my share of gas, hotel, and food for the week.” NOT, “I need some money for my trip.”

Attainable

“I’ll save $20 a week from Thanksgiving until spring break.” NOT, “I’ll win a weekly radio call-in contest to get the money for my trip.”

Realistic

“I plan to drive from Florida to Maryland in about 20 hours by using four drivers.” NOT, “I want to drive from Florida to Maryland in about a half a day.”

Time-bound

“I’ll have the $175 for my trip expenses saved by April 3.” NOT, “I want to save up enough money by early spring.”

It's OK to Start Small

Many people think they need to start with $1,000 to start saving, or make a big contribution to a retirement account. This is not true. It is ok to start small. Figure out what you can afford now and get in the habit of saving. Just make sure to increase the amount you save as your income increases and/or as you pay down debt.

You Need Savings Goals

Carefully think about what you want your savings accounts to accomplish and set goals. Having goals for your money will help you better prepare, and it gives you something to work for. Then you need to create a plan to help you reach those goals. Savings should be part of your budget! Think of your savings contributions as an "expense", and an important one at that. Put "pay yourself" at the top of your financial priorities list.

Spending is Never Saving

Many people talk about how they "saved" when they get a good deal. But you aren’t really saving – you’re still spending money. If you don’t need the item or don’t even really want it that much, then the spending aspect is even more pronounced. Don’t confuse getting a good bargain with saving money.

It is Possible to get too Carried Away

While you want to save for the future, it’s possible to get too carried away with saving money. Remember that life is also for living. Strike a balance so that you’re saving enough to cover yourself during an emergency but also enjoying today.