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How to Make a Savings Plan

A savings plan is a critical tool for managing money to meet short-, medium-, or long-term financial goals. To make a savings plan, follow the steps outlined below:

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1. Set savings goals.

The main goals of savings are to have enough for the following categories:

  • Expected Future Events
  • Emergencies
  • Optional Expenditures
  • Building Assets

Your savings target should be challenging enough, but do remember that every person or family may have a different reason to save.

2. Figure out how much you need to save over what period of time to meet your savings goals. Set a savings target.

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3. Figure out how much you are earning over this period of time, the regularity

(or irregularity) of your earnings, and how much you can expect to save on a regular basis.

4. Identify which expense you can cut back (for example, video rental, cigarettes, or tea) and reallocate this amount to your savings.

5. Decide where you will save. Identify places to save, available savings products, and their pros and cons.

6. Plan how much and how often you will save. For example, you could put a specified amount aside in an envelope when you are paid or at the end of each business day and keep it in a safe place until you are able to take it to the bank. Go to the bank on a set day of the week or month. If you are a wage earner and your employer is linked to a bank, consider a deduction from your paycheck that is automatically deposited into your savings account.

 7. Keep track of your savings. Monitor progress towards your savings target on a regular basis by checking the amount you have saved and how close you are to your goal.