Save to reach your goals

August 31, 2000

Save to reach your goals

Why should you and your family save? We can get so caught up in everyday problems that we forget to think about the future.

However, your future standard of living depends on the plans you make - or don't make - now.


What are your family goals? A new TV or refrigerator? Clothes? Vacations? College? Retirement income? Whatever they are, it's time to develop a savings plan to help you realize your goals. First ask yourself the following:

* How much money do I need to meet my financial goals?

* How much time do I have to save the money?

* What interest can I earn on my savings?

Once you have answered these questions, you can calculate how much money you need to save each month. For example, to save $1,200 by next year, you need to put aside $100 a month ($1,200 divided by 12 months) or $23.08 a week ($1,200 divided by 52 weeks). The key to a successful savings plan is to save regularly.


When you do this, you can let time work for you. Deposit money in an account or an investment that earns interest. When your money earns interest, you need to put aside less each month to save the same amount. A higher interest rate will earn you more money.

You might think your income level prohibits you from saving money. But when you make a decision to pay yourself first - to save money before spending the rest - you will be amazed at the results.

If saving money is your goal, here are some ideas to get you started:

* Ask your employer to deposit money directly from your paycheck into a savings account or tax-deferred retirement plan, such as a 401(k). It is always easier to save money before it goes into your pocket.

* Think of small ways to reduce your spending. Skipping that doughnut and coffee on the way to work can add up to hundreds of dollars over time.

* Save your small change. Every night, put a dollar bill and the loose change from your pocket into a can or jar. In a year, you might save more than $500.

* Try to reduce your debt. Find a low-interest credit card and transfer your balances. You could save more than $200, which you can use to pay down your debt. Easier still - call the company whose card you are using now and ask for a lower rate. You'll be surprised how often they say, "yes."

* Continue paying off a loan. Have you just finished or are about to finish paying for furniture or a car? Continue making the same monthly payment to yourself. You are already accustomed to the monthly loan payment; putting the monthly payment in your savings account should be relatively painless, with little or no effect on your lifestyle.

The sooner you start saving, the more time your money has to grow. The satisfaction of watching your money grow can motivate you to resist spending. Set financial goals for you and your family, develop a plan and stick to it. Start saving now!

Maryland Cooperative Extension has a fact sheet, "Savings Basics." If you would like this information, send a self-addressed, 33-cent stamped business-size envelope to Maryland Cooperative Extension - Washington County, 7303 Sharpsburg Pike, Boonsboro, Md. 21713. Mark the envelope, "Savings."

Lynn F. Little is a family and consumer sciences extension educator for Maryland Cooperative Extension, Washington County. Maryland Cooperative Extension programs are open to all citizens without regard to race, color, sex, disability, age, religion or national origin.

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