Savings Strategies to Help You Reach Your Short-Term Goals

Most savers have several goals they want to achieve. Some are likely to be short-term savings goals, such as saving for a special vacation, a new car, or just building your emergency fund. You may be able to accomplish a short-term saving goal in just a few months to a few years, allowing you to celebrate a milestone and build financial confidence and security.

Financially speaking, a short-term goal is one that can be accomplished within a few months to a few years. Some examples include saving for a home repair, a vacation, or an emergency fund.

A long-term goal is one that typically requires five years or more to reach. Sometimes, long-term goals can take decades, such as saving for retirement, sending kids to college, or paying off a home loan.

It’s important to understand the difference between short-term and long-term goals because your savings timeline may affect your savings strategy.

Think about a short-term goal you want to achieve within about three years or less. The first step is to determine how much you’ll need to save to accomplish that goal.

Take time to conduct some research and figure out how much you’ll need to spend on the vacation or the car or whatever your goal is. If your short-term goal is to beef up your emergency fund, aim to save a total of three to six months’ worth of expenses.

Once you have a number in mind, review your budget and spending habits to determine any adjustments you can make to free up money for your goal. By setting up automatic recurring deposits, you can make sure you’ll stay committed and make regular progress toward your goal.

Whatever your approach to saving more, depositing the money in the right type of account may help you reach your goal. Consider two savings options: high-yield savings accounts and Certificates of Deposit (CDs).

Because they offer easy access to your money when you need it, savings accounts are a popular strategy for short-term goals. With a high-yield savings account like Growth Savings, you can typically earn a higher interest rate than with a traditional savings account, helping you reach your goal faster. A high-yield savings account also provides flexibility for funding, so you can set up automatic recurring deposits or just make deposits whenever you have extra funds available.

You’ll be able to earn a competitive interest rate, while having access to withdraw funds whenever you want. See how much you could save today with the Growth Savings Calculator.

A CD is another type of deposit account that typically offers a higher interest rate than a traditional savings account. In exchange for that guaranteed interest rate, you agree to keep your money deposited for a set amount of time, known as the CD term. If you withdraw your money before the CD term ends, you could be charged a penalty.

A high-yield savings account and a CD can both be helpful short-term savings strategies to accomplish your financial goals. You don’t have to pick just one; many savers use both high-yield savings accounts and CDs to meet their goals. Determine the right mix of flexibility, liquidity, and maximized returns to fit your specific needs.

Consider maximizing your savings strategy with a Growth CD and a Growth Savings account.

Disclaimer: This article is for general information and education only. It should not be considered financial or tax advice.