What is it, what is it for and how to make a Monthly, Short, Medium or Long Term Savings Plan?


Knowing how to manage personal money is usually a challenge and more when you want to save a certain amount of money to buy or acquire something. An easy way to save is to set up a monthly savings plan. If you want to know more about this topic, keep reading What is it, what is it for and how to make a monthly, short, medium or long-term savings plan?

What is a monthly savings plan and what is it for?

We can say that a savings plan is to build a well-established planning for savings, which allows ordering and more formally carrying out the habit of saving.

An exact amount is established that will be saved and accumulated monthly or periodically, and that will not be touched until all the money that was saved for a certain purpose is collected. The monthly savings plan allows you to set a much stricter savings, since it is much better to establish the amounts that will be saved monthly than to choose amounts at random.

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So the monthly savings plan It goes beyond setting aside a little money each month, it means setting aside exact amounts that should be saved periodically and the purpose for which you are saving.

Short term

Defined as short term when aspiration meet goal in one year or less, which can be anything from buying a car, to paying for college, a wedding or a vacation. In this case, you should think about investing your money safely without the risk of losing it, because you will use it promptly.

person put money piggy bank save

Avoid as much as possible mishaps and unforeseen, as they could affect and even prevent achieving the established savings goal. An example of a short-term goal would be to save a certain amount of money this year, such as $ 2,000, so to reach this goal you must first start calculating how much you need to save from the beginning of the year until the end of the year to reach the established goal.

In a short-term monthly savings plan, the budgeting technique which is very organized, since the first thing you must do is the evaluation of finances, where you calculate your net income, that is, your income minus your expenses.

Then evaluate your monthly expenses, separating them by categories and finally capture all the data in an organized way in a database, such as Excel for example, in order to save what is necessary.

Medium term

These are savings goals that They are stipulated in a period of 1 to 4 years, and an example of this could be saving a larger sum of money for your wedding, to name a particular example.

So in this situation it is necessary to do a calculation of how much money you should set aside annually. Then you are required to stipulate the amount that you will set aside monthly and check if you can take money from your profits to reach your goal and how much you can have. In this type of savings plan, the budgeting technique is also very useful, since it allows you to have everything organized and achieve your goal more easily.

Long-term

This type of savings plan is usually based on saving money that you will use in your old age, when you retire from your job or retire. In fact, in many companies and countries they have regulations that stipulate that workers must open a fund in a bank and accumulate interest for the future.

mother daughter save coins piggy bank goal savings

Even if you are already in a bank with one of these plans, you should check if the interest is sufficient, otherwise it would be good to consider switching to another bank, in addition to creating your own personal savings planSince getting a retirement plan is one of the best ways to invest the money you have.

For it, you must sit down to decide when you will retireThen you calculate how many years you will need to support yourself and then prepare a budget and in the same way, set aside money monthly to have a stable future, as part of your long-term goals.

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