Saving for long-term goals can seem like a mystery, obstacle course, or a challenge at the very least. How do we even begin to save for our long-term goals? What are the tips and strategies you have for saving for long-term goals? I'd love to know in the comments below!
My first strategy is to start early. The more time you have on your side, the more able you'll be to break down the ultimate savings goal into "bite-sized amounts". For example, say you have a wedding coming up where you'd like to save for a $25,000.00 budget. Say you just recently got engaged and are planning to get married in 3 years time. 3 years x 12 months in each year = 36 months to save. Take your ultimate goal of that $25,000.00 wedding budget and divide by 36 months to save and you get an amount of $694.00 per month. By breaking the ultimate financial goal down into bite-sized, monthly chunks, it becomes easier and more managable to save the intended amount.
My second strategy is to have investment returns work in your favour. Usually I would say that investments are intended more for the long term, but in the case of the wedding above, there are 3 years to save (and invest) towards the goal. You can take the amount you currently have saved and lock it in to a one-year GIC at 4.5% (or whichever rate your bank currently is offering), make interest and have the investment mature with much time left to the end goal of getting married 3 years into the future.
My third strategy is to save as much as you can and eliminate debt if possible. People will have differing opinions but I'm of the thinking that debt can be a killer. Consumer debts especially cost so much in interest (at least 19.99% in Canada) and it simply makes sense to eliminate debt and save as much as possible towards the ultimate long-term goal (in some months, surpassing the allotted monthly goal). The more you save, the better situation you're in. On that note, try your best to Do It Yourself or to fix things that are broken and to use all of the belongings you currently own.
What tips, tactics and strategies do you have to save for long-term financial goals? I'd love to know in the comments below (especially to hear of your success stories!). Signed, Filipina Budget Girl.