Savings Tip #4: Free Money from Compound Interest
Lacey |
Thoughtfully composed by Lacey Filed under: Wedding, Financial Planning |
Use a savings calculator to figure out how much money you need to save in the amount of time you have to reach your goal.
To use this calculator, enter in your current amount of savings. For us that is $59. Now enter the “return you can earn” which is the interest rate of your savings account, for us that is 5% from our Emigrant account. Now enter your savings goal, the total amount that you need, for us that is $5,000. Our length of time is 2 years, and we will contribute to our savings monthly. Now we will leave the amount blank on our monthly investment, because this is what we would like to know. Now hit results, and we find that Tanner and I need to save $196 a month to save up $5,000 in 2 years, since we already have $59.
Here’s the hard part - sticking to the goal of $196. What’s the key here? Paying yourself first! The first thing that comes out of your account each month should be your savings - not even your bills! Now if you can’t afford the $196 a month, you may need to adjust your goal, by planning your wedding at a later date, or for less money. You can also employ some of our other savings tips to try to reach this goal.
If you can afford the monthly amount, or have adjusted your amount accordingly, try setting up reminders to take out your savings money first, or set up an automatic bank transfer to your savings. Many banks allow these types of transfers.
The Simple Dollar has a great post on setting achievable financial goals. based on keeping goals simple and achievable. This is great for people who have never saved a large amount of money before. Take a look at their post.
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April 30th, 2007 at 2:49 pm
oh absolutely, i’ve been writing up a little entry about your blog website. i think it’s a great blog, btw! however, my blog doesn’t generate a huge traffic… (if any!) although, the links on my page “something old something new”, “wedding bee” and “style me pretty”, do get lots of readers. you may want to post something there? or email the blog owners?
btw, when is your wedding date? do you have a date set, yet?