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Save Toward a Goal

What’s the Payoff?

You’ll have the money, on hand and hassle-free, for what you need and want.

Why You Shouldn’t Avoid It

Having at-the-ready cash for your kid’s wedding, that sun-and-sand escape or an emergency sure beats relying on Plan C (Credit), which sets you up for the Big D (Debt).

1. Pick a Number

Strange to say, people often skip the obvious first step of deciding how much to save. That’s because real numbers can be scary. “Let’s save for a cool new fridge with an icemaker and extra freezer space” sounds fun. “Let’s save $1,200″ sounds like work. But getting a hard figure in your head is critical to making that new appliance (or whatever you want) a reality. It only takes a little basic math to solidify your goal.


Grab a pen and write down what you are saving for — that spacious and lovely new fridge, perhaps. Then…

RUN THE NUMBERS. Do some comparison shopping to find the best price.

DON’T FORGET THE EXTRAS. Add the taxes, delivery, registration, installation, shipping, insurance or whatever other annoying sub-charges come with whatever you’re saving for. In your optimism, don’t lowball yourself.

THINK AHEAD. If you’re financing a big-ticket item, you need to come up with the down payment. Would it be better to put down a larger nut (which will take longer to save) to keep your monthly payments lower, or can you handle higher monthly payments along with the other demands on your paycheck? All this factors into your goal number.

2. Set Up a Schedule

OK, let’s say you are buying your fridge outright, and with all the added fees, the number has grown to $1,500. You can’t assume you’ll find $50 here and there and remember to save it. That’s why your next move is to figure out a savings schedule.


Create a timeline based on when you’d ideally like the item, and how much you can realistically sock away each month. Try on a few different scenarios.

For example, if you want your $1,500 fridge six months from now, you’ll need to save $250 a month to buy it outright. If that seems impossible, how about stretching your time frame to nine months? That works out to $167 per month. If you get paid every two weeks, it may feel more doable to save $84 from each check for nine months to reach your goal. The idea is to find a balance between how soon you absolutely need the item and how much you can comfortably put aside.

3. Separate Your Savings

This is another step that people tend to skip — the “actually saving the money” part of saving money. Why? Because it’s so easy to fritter your dollars away on other stuff. In fact, pooling it all in your checking account makes it too tempting to dip into. I recommend separating your savings.


Open a dedicated savings account, but don’t link it to your checking or any account with an ATM card. Then set up automatic transfers from your checking account to the dedicated account for the dates on your savings schedule.

After that, all you have to do is enjoy the magic of “set it and forget it.” Research has shown that putting savings on autopilot improves success (i.e., if you don’t have to make the decision to save each week, you can’t decide not to). Soon you’ll be enjoying a nice cold glass of iced tea — with ice from your state-of-the-art new freezer.

“I made a small change”

Last year, when Kimberly Gauthier’s new puppy, Riley, fell ill and died a week later from canine parvovirus (a highly contagious viral disease that puppies are particularly susceptible to), the vet bills were more than $3,000. The Marysville, WA, family’s small savings were wiped out.

“In the end, I know I did all that I could to help Riley and I don’t regret a dime I spent. But her passing was a financial blow as well as an emotional one — it took months for our bank account to recover. The experience made me realize I needed a rainy-day fund. So I opened up an emergency account just for our pets, and even invested in pet insurance. I also created an emergency fund for anything else unexpected, like car repairs. We put $50 into them each month. I love having that cushion.”

Financial Expert

MP Dunleavey writes monthly in WD about easy moves you can make to improve your finances. She is the editor-in-chief of, a daily email about getting more out of your life and your money.

“Save toward a goal” is part 6 of a multipart yearlong series.

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