From buying the latest iPhone you desire to that overseas vacation you’ve always wanted, we all have aspirations and dreams that we want to fulfil. And we know that paying outright for these goals is better than putting them on a credit card.
Saving for these goals can be a challenge because unplanned expenses crop up and you feel the need to dip into your savings account.
There is a way to save effectively that puts you on a path to living your dreams – goal based savings!
With a little bit of planning and being smart about money, you too can meet your aspirations without compromising your financial stability.
Through goal based savings you set targets for yourself and you save towards that goal. It is as simple as that. Your goal could be anything from buying a phone to buying a house.
Let’s take the example of buying an iPhone. Saving towards the goal of buying an iPhone by systematically saving a certain amount every month is a goal based saving plan to buy an iPhone.
With Hubble Money Savings you can set such savings goals for practically anything. Join our waitlist and be eligible for exclusive early bird offers.
Your goals can be as diverse as your needs and the same strategy may not work for all types of savings goals. To make things simpler, it is better to divide your goals into groups based on their value and/or savings tenure.
These are goals and aspirations that are the ‘end goal’ of your savings journey. These goals require you to plan and save over a long period of time – over 5 years.
Saving for your retirement is a common example of a long term goal.
Some other common long-term goals are:
Starting early to save for long-term goals allows you to save smaller amounts and still end up with a substantial savings amount in your future.
Mutual funds, Shares/Equity, Real Estate etc. are excellent investment vehicles for you to achieve such long term goals.
Mid-term goals are those goals that you can save for in under 5 years. These are also the trickiest ones to save for because you tend to not prioritise them. They also take time to save for, but they feel not as important as your long term goals.
Common examples of mid-term goals are:
Though these goals seem like common sense, you find it difficult to save for these because the results aren’t immediate. At times you even make the mistake of clubbing these with long-term goals and you end up never saving for these.
Investment vehicles like Fixed deposits, Debt funds, Gold etc. are great for reaching your mid-term goals.
Short-term goals, as the name suggests are things you need to save for your immediate future. These are also the goals that are very tempting to use a credit card on.
Some common short-term goals are:
Since these goals are also repetitive in nature (you’ll want to upgrade your phone), it is important that you save a portion of your income towards meeting them. A little discipline and planning will go a long way!
Savings Bank Accounts that provide 3% ROI and Fixed Deposits that provide 5% ROI are traditionally recommended as good investment vehicles to fulfil these goals.
With Hubble you can save for your short term goals and earn 10% cash rewards that you redeem during your purchases.
Use the following tips to help you save effectively.
Firstly, what you cannot measure, you cannot improve.
Secondly, remember that your goals are specific to your needs. Never make the mistake of comparing your goals with someone else’s.
By setting specific, measurable goals that are achievable, realistic and time-bound (SMART), you increase the probability of achieving your goals.
‘Buy a bike’ is a vague goal.
Let’s turn this into a SMART goal.
Buy a Royal Enfield Classic 350 (Specific) that costs Rs. 2,20,000 (Measurable), by saving Rs. 20,000 per month (Realistic) on a monthly salary of Rs. 50,000 (Achievable) in one year (Time-bound).
With Hubble you can do just that!
More over, your monthly deposits earn you 10% cash rewards that are redeemable as rewards during your purchase. That means, for the above example, your returns will save you around Rs. 20,000 during your purchase.
‘I want to live comfortably’ is a long-term goal that is as vague as it gets. It is a ‘big picture’ goal.
Break down your ‘big picture’ into short term, mid term and long term goals so that you can start planning towards them.
Make a list of your goals and keep it handy. Interestingly, you remember what you note down better.
Knowing where you spend your money is crucial to your success.
Start tracking your spending. You don’t really need sophisticated apps to do this. Use whatever you are comfortable with.
What is important is that you know your expenses so that you can plan your savings accordingly. Start with calculating your monthly expenses and payments that you cannot avoid. This will not only give you a picture of where you can cut corners, but it will also give you an idea of your investment capability.
Fix a savings amount and aim to put aside this money every month towards your goals.
Remember to pay yourself (save) first every month!
Don’t make the mistake of keeping your savings in the same account that you use daily. You can’t expect your brain to remember your individual goals at all times. Before you know it, you’d have spent your Royal Enfield money on something else.
With Hubble you can put away your money towards specific goals. It also helps that your money is not locked in, so you can withdraw it during emergency situations.
It is important to choose your investment wisely. Different strategies or investment vehicles work better for different type of goals.
Some investments have low risk and reward, while some are high risk and high reward. It is important to find a balance between them so that you can meet each of your goal efficiently.
You grow as an individual and it is only natural that your goals change with time.
It is important to review your goals and your investments periodically.
It helps you to make course corrections as necessary and realign your investments towards your current goals. We recommend doing this at least once a year.
Goal-based savings are an excellent way to maintain a fulfilling and rewarding lifestyle. By dividing your goals as per your needs and by using apt strategies to meet them you set yourself up for a financially stable future.
Get rewarded for your savings habit through Hubble.
We are committed to helping you reach your savings goals faster.
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