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Battling Your Savings Fears

I’m doing a 3 part series on battling your money fears. I’ve talked about your income related fears and your debt related fears. Today I’ll be discussing your savings related fears.

Fears regarding savings fall into three main categories. Saving for emergencies, saving for college, and saving for retirement. Dealing with savings fears is much like dealing with debt fears. You need a plan and then a way to track that plan. Being in control of a situation will help reduce any fear, and a budget gives you control.

Battling Savings Fears

To deal with savings fears we need to start saving in a way that makes sense. You will want to know how much you need and when you need it by.  At first, it probably seems out of reach, but don’t panic.  Break it up into steps.  Divide the total amount you need by how many months you have until your goal.  That will give you how much you need to save per month.

Let’s say you want to have $15,000 saved in 5 years. That’s 15,000 divided by 60, which gives you $250 per month.

Once you have your monthly savings goal you will want to attack your budget. Figure out where you will be getting this money. Revamping the budget, or doing it for the first time, might bring up some income fears. If so then deal with those accordingly. You might need a part-time job or side hustle to meet your goals.

You could also rework your goals. Maybe your goal is not reasonable. To lower the monthly requirement you can either lower the total balance you want to save up or you can lengthen the time you need to accumulate your savings.

If you have long-term goals, like retirement, don’t forget about accounting for interest. Interest growth will help you meet your long term goals and allow you to save less per month or reach your goals more quickly. Use a savings calculator to help you figure out how much you need to be saving per month while taking interest into account.

Once you have an achievable goal and a plan to meet this goal you will want to track your progress. Tracking your progress will help relieve your fears now, not just when the goal is met.

In general, your money fears will go away when you are feeling in control. A budget alone will get you in control of your money and stop many of the common money fears.

2 thoughts on “Battling Your Savings Fears”

  1. I also believe that best way to save is to have a reverse engineering plan for saving — starting with what amount you want by certain time frame and then use that to attack your budgeting goals.

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