How do you save targeted for a goal?
Target saving is saving for a specific purpose. That goal can be something great, such as your child’s study, but also something small like a vacation. There is a different way to save for each goal. How can you best save for your purpose?
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The first step is to determine the purpose for which you want to save. Are you saving for something big that is still far away? Do you save for a car, your wedding? Do you save to build up a reserve? You choose a different savings account for each of these saving goals. If you have several saving goals, it may be smart to open multiple savings accounts. You save in a more targeted way. But it is also possible that several invoices become unclear.
Save for a purpose
The second step is to choose your saving method. Saving for a specific purpose is possible with specially developed savings products. For example, Vorabank offers a Target Savings savings account. At Cashieme you can find Target Pairs with different pots. And so there are more banks with comparable savings accounts.
But you can also choose to save for a purpose in a ‘regular’ savings account. These are the most important options:
- Bank saving: with bank saving you can save for your pension. You save bank savings on a blocked account. The money is only released at the agreed time.
- Deposit: on a savings deposit or a term deposit you deposit your money for an agreed period, varying from a few months to 20 years. You receive a higher interest rate in exchange for securing your money. So do you save for a goal and do you know when that goal should be achieved? Then it is wise to choose a deposit. Consider, for example, your child’s study in 10 years or next year’s holiday.
- Child savings account: on a youth savings account you can save for and with your child. So if your goal is to save for your child or together with your child, then a children’s savings account is a good option.
- Savings account: are you saving because you want money in hand for unforeseen expenses or do you not know exactly when you need the money? Then you can opt for a savings account or an internet savings account. These savings accounts provide a relatively low interest rate compared to, for example, a deposit. But you can withdraw your money or deposit money at any time. Make a good comparison between the different savings accounts to see where you get the highest savings interest. Often you can even save without conditions.
Target savings with a savings plan
The third step is to prepare a savings plan. You know what you want to save for and which account suits that. Now it’s time to open the account and determine how much you’ll save. Do you put in money every month? If so how much? Or do you choose to put a one-off amount aside and then wait for the interest? How much do you put aside? There are of course many intermediate forms. A plan and regularly checking how the saving process works ensures that you save more consciously and often more.
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