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How to Shift from Short-Term to Long-Term Saving

 

Long term saving is one of the best ways to meet your saving goals. Whether you're saving for retirement, a family vacation or teaching your kids the value of a dollar, saving is an essential way to prepare for the unexpected. Short term savings is often a little easier, because you can see the end in site and get gratification from that saving a little sooner. You can shift from short term to long term saving by putting a couple of steps into place to make it fun and easier for everyone.

Step 1: Open a Savings Account

Just because you're shifting to long term saving doesn't mean you have to miss out on the fun you're experiencing from short term savings. Minimize the amount you put into short term savings and shift the different to your long term savings amount, but set goals for the short term savings and encourage everyone to keep helping out. When you have small rewards along the way, it won't be as difficult or tempting when saving long term.

Step 2: Set Your Long Term Goal

Before you start saving, you need to know what you're saving for. Don't just throw one word out there; sit down and really define it so you can visualize it. This gives you a reminder point and can help you stay on track and resist the urge to spend the money. If your goal is saving for retirement, plan that out. Are you going to sell your house and move to your dream location? What activities do you see yourself doing? Do you want to buy an RV and travel around the country? Figure out all of these things and post your answers where you will see them every day.

Step 3: Crunch the Numbers

Though planning exactly how much you need for long term savings can be difficult, take a look at your overall goal and break it down into something reasonable. If you're long term goal is to purchase an RV with cash, go window shop for your dream RV. Add a couple thousand to the purchase price to account for inflation and put that number down on paper. Break it up into years and even months to give you an idea of what you need to set aside every month to stay on track to meet that goal. 

Step 4: Give Yourself a Treat

While the short term savings account can do this for you too, this is a bit different. Set a reward for a goal that's a bit further away than a family dinner. Instead, say for every $1000 you put into savings, you get to spent $100 on a pair of shoes (or other favorite thing). Customize the treat to fit your wants and personality.

Shifting to long term saving doesn't have to be a jarring experience. By setting up a few simple tricks, you can make the transition seamless and not feel like you're losing anything in the process.

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