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Setting savings goals is a crucial step towards financial stability and independence. It provides a clear path to follow and helps you stay focused on your financial priorities. Without clearly defined goals, it's easy to lose track of where your money is going and miss out on opportunities to save for important milestones.
As Sirena Thompson, a Centralized Underwriter at First Alliance Credit Union, mentioned in a recent episode of the Good Money Moves podcast, "Setting a good financial goal has to do with not cutting yourself off of things that bring you joy or that you would suffer without."
Savings goals can vary widely depending on individual needs and circumstances. Common goals include building an emergency fund, saving for a down payment on a house, or paying down debt. Regardless of the specific goal, having a plan in place makes it easier to achieve financial success.
Achieving your savings goals works best when you follow a clear, realistic plan that fits your life. Here’s a simple, step-by-step framework to help first-time savers get started with confidence:
Define Your Goal: Be specific about what you want to achieve. For example, instead of saying "I want to save money," specify "I want to save $1,500 for an emergency fund."
Set a Time Frame: Decide by when you want to achieve your goal. Having a deadline helps create a sense of urgency and keeps you motivated.
Break It Down: Divide your goal into smaller, achievable milestones. This way, you can celebrate small wins along the way, which Sirena highlighted in the podcast, as essential for staying motivated "
Create a Budget: Use a budgeting framework like zero-based budgeting or the 50/30/20 rule to allocate funds towards your savings goal.
Track Your Progress: Regularly review your progress and make adjustments as needed. Life happens, and it's okay to reassess your goals and strategies.
Let’s walk through a simple, real-life example of how you might save $1,500 for an emergency fund, using the step-by-step framework outlined above so you can see exactly how it works in practice:
Define Your Goal: "I want to save $1,500 for an emergency fund."
Set a Time Frame: "I want to achieve this in 12 months."
Break It Down: Saving $1,500 in 12 months means you need to save approximately $125 each month.
Create a Budget: Let's use the 50/30/20 budgeting framework (more on this step below). This means allocating 50% of your income to needs, 30% to wants, and 20% to savings and debt repayment. If your monthly income is $2,500, you would allocate $500 (20%) towards savings and debt repayment, which comfortably covers the $125 monthly savings goal.
Track Your Progress: Each month, review your budget and savings to ensure you’re on track. Adjust as necessary if unexpected expenses arise. It's normal to need to adjust your approach from time to time.
Different budgeting frameworks can help you reach your savings goals by giving you a clear, intentional plan for every dollar you earn. Two approachable methods many people find helpful are zero-based budgeting and the 50/30/20 rule.
Zero-Based Budgeting: This method involves allocating every dollar of your income to specific expenses, savings, or debt repayment until you have zero dollars left to budget. It forces you to account for every dollar, ensuring that you’re deliberately putting money towards your savings goals.
50/30/20 Rule: This simpler approach divides your income into three categories: 50% for needs, 30% for wants, and 20% for savings and debt repayment. It provides flexibility while ensuring that a significant portion of your income is directed towards financial goals.
Sirena Thompson emphasized the importance of budgeting in the podcast, sharing how she and her husband used a snapshot budget worksheet from First Alliance Credit Union to identify areas where they could cut back and save more effectively.
Reaching your savings goal isn’t about perfection, it’s about consistency and small, intentional choices that add up over time. Once you’ve set a clear target and created your plan, the next step is to build daily habits and use the right tools to keep your momentum going.
Making small, everyday changes can open up more room in your budget so you can consistently fund your savings goals without feeling deprived. Here are a few practical, realistic ideas to consider as you adjust your budget to help you meet your savings goals:
Cut Back on Dining Out: Preparing meals at home can save a significant amount of money. As Sirena mentioned, "I think there's a lot of people in Minnesota that will be shocked at their Kwik Trip bill...just looking at that for me, it was so much easier to say, 'okay, maybe lunch at Kwik Trip isn't necessary every day'."
Reduce Unnecessary Expenses: Identify areas where you can cut back, such as daily coffee runs or impulse purchases. Small adjustments can add up over time.
Automate Savings: Set up automatic transfers to your savings account. This removes the temptation to spend the money and ensures that saving becomes a consistent habit.
Staying motivated is crucial to achieving your savings goals. One of the best ways to stay on track is to recognize and celebrate your small milestones along the way. For example, you might pause to acknowledge when you’ve saved your first $100, reached the halfway point to your goal, or successfully stuck to your budget for three months in a row. These check-in points give you visible proof that your hard work is paying off, which can make it easier to keep going when saving feels slow or life gets busy.
Like Sirena shared on the podcast,
"Breaking it into those smaller time chunks so you feel like you're achieving something, and you feel like you've won something in every small section." ~ Sirena Thompson
Your celebrations don’t have to be big or expensive, something as simple as treating yourself to a favorite at-home movie night, sharing your progress with a trusted friend, or updating a visual tracker on your fridge can help you feel proud of what you’ve accomplished. When you intentionally notice your progress and give yourself credit, you reinforce positive habits, build confidence, and stay encouraged to keep moving toward your larger financial goals.
Life is unpredictable, and sometimes your plans will need to shift. If an emergency comes up and you need to use some of the money you’ve set aside, don’t be hard on yourself. That’s exactly what an emergency fund is there for, to protect you when life doesn’t go according to plan.
Once again, Sirena said it best on the podcast,
"You can have the most, strategic and well-thought-out budget and the best goals laid out in front of you, and then your car dies and that's that. There goes the savings you've worked so hard for." ~ Sirena Thompson
Instead of viewing it as a setback, try to see it as a temporary detour. Take a moment to reassess your goals, adjust your budget as needed, and then start moving forward again with a plan that works for where you are today. You might decide to extend your original timeline, lower your target for a little while, or focus on rebuilding your emergency savings before tackling your next goal.
What matters most is that you stay engaged with your finances and keep taking intentional steps, even if they’re smaller than before. Giving yourself permission to pivot when life changes helps you avoid burnout, reduces stress, and keeps saving sustainable for the long term.
Setting and achieving savings goals is a journey that requires planning, discipline, and flexibility. By following this step-by-step framework and using practical budgeting methods, you can build strong financial habits and achieve your long-term savings goals. Remember, every small step counts towards your financial success.
When you’re ready to take your next step, First Alliance Credit Union is here to support you. Whether you’re opening your first savings account or building on the accounts you already have with us, you’ll find free budgeting tools, worksheets, and financial education to help you stay on track.
Our team is always available to talk through your goals, answer questions, and help you customize a plan that fits your life. You can also use our online and mobile banking tools to set up automatic transfers, label your savings goals, and monitor your progress over time. With the right support and a clear plan, you can feel confident knowing you’re moving closer to the financial future you want, one intentional step at a time.
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