The secret to saving money fast: Use goals (2024)

You can achieve a lot in a short period of time, including kickstarting your savings. The secret? Creating a savings plan that aligns with your bigger goals, is specific and measurable and challenges you to change money management behaviors. Clint Jasperson, a Thrivent wealth advisor serving in Colorado and Wyoming, explains "Money is ultimately a tool. And if we're stewards of that tool for the time on this Earth, then [we have a value system] to make very purposeful decisions with."

The SMART approach is a framework for setting specific, measurable, achievable, relevant and time-bound goals. Using this method with the money-saving process can help you make purposeful decisions around money goals and take actions that align with your values.

Here's what makes it the secret of how to save up money fast.

The key to creating SMART financial goals is specificity. Consider the contrast of these two statements: "I'd like to save for a house down payment" and "I've identified the neighborhood to raise a family in and know the home prices there. For the next three years, I'm putting $500 a month into a money market account for a down payment."

When you're clear about your financial goals, it becomes easier to work the specifics that will lead to achieving them into your savings approach.

Here's how to clarify your financial goal into a SMART one. Think about what you want to accomplish and then ask yourself:

• Is it specific? Think about the who, what, where, when and why of the goal that helps you hone the fine details.
• Is it measurable? Having a goal where you can identify progress lets you celebrate when you make advancements or to course-correct when you need it.
• Is it achievable? Review how realistic your goals are, especially as they fit into the rest of your finances.
• Is it relevant? Define why the goal means something to you so you're motivated by purpose. It can help to align it with your values.
• Is it time-bound? Setting a time limit helps make your goal feel more deadline-driven, be it three months or decades from now.

Once you have your goal set, note it and start tracking. One of the benefits of SMART financial goals is it allows you to follow your progress and make adjustments as you go.

With your purpose-driven mindset and clear objectives, you can address the more tangible aspects of your savings plan and learn how to save up money fast for specific goals.

The first step to saving money? Look at your cash flow. Track all of your income and expenses each month. It's a vital part of budgeting basics, and it lets you discover how you spend money each month and identify any potential red-flag spending habits to change.

Then, choose a budget to follow. Some popular budgeting types include:

• The 50/30/20 system, where you divide your budget into needs, wants and savings. There are several variations on this portioning approach that you can try, too.
• Zero-based budgeting, which allocates every dollar of your income to specific expenses and savings. This may be a good fit if you enjoy precision.
• Envelope budgeting, in which you physically place cash in envelopes marked for their purpose. This is a hands-on way to divide and distribute your money.
• No-budget budgeting, where you set aside a fixed portion of your income for savings, then pay out your fixed expenses. What remains can be used however you like.

So, what’s the best budgeting method to choose? Simply, the one you’ll stick to.

Review and categorize your monthly expenses, focusing on the largest and most variable, such as utilities, groceries or subscription services. A few categories likely will stand out to show where you're overspending or paying for unnecessary expenses.

Look for opportunities to reduce costs on anything you don't regularly use and where you can save on groceries or dining out. For bills like internet or cable, consider negotiating with service providers for discounts. It can help to focus on securing what you need to survive first and realize the nonessential "nice to haves" are usually easier to trim or cut entirely.

If you know there's a large, necessary purchase coming up for your household, like a new refrigerator, research when the item typically goes on sale. Holiday events and end-of-season clearances are usually a great time to buy if you can coordinate the timing.

Keep in mind, however, that if you're buying things you don't need just because there's a good sale, you're not actually saving money.

Embrace the pay-yourself-first philosophy. Set aside a reasonable portion of your income for your savings goals before paying bills and other expenses. This approach helps ensure you're saving something every pay period.

Set up automatic transfers to your savings account each payday to save consistently. Becoming purposeful can help you build good financial habits. You can track your monthly progress, knowing you're saving toward something meaningful.

Automation isn't just for savings. You also can automate bill pay for car payments, credit card bills, utilities and even your housing costs. The biggest benefit of automated payments is that it avoids late fees, which can hurt your savings and negatively impact your credit score.

One important thing to remember, though, is to ensure you have sufficient funds in your account to cover these payments.

Compare credit cards to find those offering the best options for your spending habits. Not all reward and cash back cards work for everyone or benefit users equally. For example, some rewards cards, such as cash back, could better fit your spending habits and help you pay off balances.

If your card charges a high annual fee, weigh the benefits and costs. Switching to a card with a lower or no fee may save you money in the long run.

If changing jobs isn't an option and you aren't eligible for a raise at work, you might consider adding a secondary income stream to support your savings goals. Look for flexible options that fit your schedule and match your skills and interests to make it sustainable.

Popular side hustles include:

• Rideshares
• Food delivery
• Tutoring
• Freelancing
• Consulting
• Pet sitting or walking
• Selling unwanted items
  

You can shop around for car insurance quotes and compare rates. First, you may want to speak with your current insurer. Ask about discounts for good driving records, multiple vehicles or bundling with other types of coverage, such as homeowners insurance.

If you still need more affordable car insurance, consider adjusting your deductible or coverage type. For instance, an older car may not require comprehensive coverage. These small changes may lower your premium.

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What you plan on doing with your savings helps determine the best place to store cash. You'll also want to consider other factors, such as your liquidity needs, investment risk tolerance and the impact of inflation. Common considerations include:

• Savings accounts
• Certificates of deposit (CDs)
• Money market accounts
• Money market mutual funds
• Bonds

For example, a high-yield savings or money market account may be the best bet for a short-term goal like saving for a car. However, for a longer-term goal where you may not need the money for years, such as for a down payment on a house, CDs may be a consideration.

• Get more tips: Where to consider keeping your cash

Creating a savings habit starts with a clear plan and setting SMART financial goals. Understanding your priorities and how they fit into your budget and expenses is a great first step. Then, aligning your savings strategy with well-defined goals ensures every financial decision contributes directly to your objectives and helps you save money quickly.

Consider connecting with a Thrivent financial advisor for help building a financial strategy around your goals.