Why set savings goals? Because one of the most valuable financial skills you can learn is how to clearly identify your goals. By knowing precisely what you want to accomplish, you’ll be more motivated to achieve it—and you’ll be in a position to develop a savings plan. Get started by using a Savings Goal Worksheet to define your goals.
Once your goals are set, you can put your plan into action. You don’t have to save a lot of money to have it add up substantially over time. The charts below show how your money can grow, depending on how much you save every month and what interest rate you earn on your savings.
For example, if you save $50 a month and earn 6 percent interest on it, you’ll have $3,489 at the end of five years. At the end of 10 years, you’ll have $8,194.
From the charts, you can see that there are three ways to maximize your savings: increase the amount you put into savings, increase the interest rate you earn, and increase the length of time you save.
To learn more about goal setting, visit Setting Financial Goals.