Whether you are a student surviving college or married with your first home, it is easy to postpone saving. It can be surprising to learn exactly how much delaying your savings may be costing you and having a calculator can help you build a saving strategy quickly. By adding a few details about the payments you can make, you can quickly estimate the potential value of any savings plan.
Let us begin by going over what this calculator can be used for and continue forward on how you may use it.
Set up a money saving strategy that works for you
In life, there may be many moments that are financially challenging, some of which may be expected while others may come as a complete surprise. Being prepared for these periods in life requires a good savings plan, but coming up with the right system is hard. Even if you can't start saving today, an important first step is to start creating an approach that works for you.
There are no absolute rules when it comes to saving, only that the best approach is one that you can stick to and it is better to start sooner than later. Building the right savings plan to suit your lifestyle and goals can provide you with peace of mind and freedom to navigate life's next great moments with ease. Moments like your first car or home purchase, family weddings, travel with friends, or even your retirement. Whatever your goal, make a plan that will help you reach it and don't take a chance on the calculations.
Using the delayed savings plan calculator
The delayed savings plan calculator is very straightforward to use and is designed to illustrate your potential gains. After deciding when you can start your savings, along with the contributions you can make, the system will generate a report of how much you may accumulate over time and how much you can save if you start now.
This service offers you the chance to assess different strategies and timings for building up your savings in a way that makes the most financial sense. You can decide if it is worth waiting or if you should take a more proactive approach, after learning what you may be able to achieve.
Continue reading for some essential tips for building your savings, and a step-by-step guide to using the delayed savings plan calculator.
Essential tips for building your savings
The most important aspect of building your savings is creating a plan that fits your real life. There are no official rules, but there are many great strategies that can help you along the way:
• Visualization: The most important aspect of a successful savings plan is to understand what you are truly saving for. Whether it is a new home, prestigious college enrolment, or a comfortable retirement, being able to visualize what you want will give you a clear picture of your long-term goal. The more clear the picture, the easier it will be to make daily decisions to promote that success.
• Deliberate Action: Once you know what you want, it's time to start setting aside the money you need for that goal- this is where saving becomes involved. Moving your funds into a separate account and limiting your spending on things that bring you instant satisfaction is most difficult in the beginning phases- it is a lot of work that requires you to take an aggressive stance, with minimal immediate reward. But by limiting yourself now, you are guaranteeing yourself a much bigger reward in the future. You just have to push through the first few months.
• Growth: After the initial three to six months, building your savings will become much easier- it will become second nature! That's when you move into the phase of watching your savings grow. Through the power of compound interest, you will watch your savings multiply each year, until they eventually double, or triple- making your goal feel more tangible than ever. At some point, you may even wonder why you delayed your savings in the first place.
• Milestones: Yet, it can also get tiring when you are consistently focused on saving, as it takes a high level of persistence. Set financial benchmarks and accompanying rewards for yourself when you meet them. Once you have hit a financial target treat yourself to something nice like a nice weekend getaway, a fancy dinner, or that item you have had your eye on recently- you deserve it.
• Be flexible: Some years or periods in your life you may not save up as much as you'd like, but don't get discouraged. You are better off to adjust your rate of saving to your financial situation. If the kids are off to university or an emergency places a damper on your finances, reel back your contributions. Then once things settle you can use every opportunity to recover your payments, like when you pay off your mortgage or when you get a raise. Chances are, you'll still come out ahead with less grief.
How to use the delayed savings plan calculator - step by step
There is two parts to the deferred savings plan calculator: an information intake and integrated results. You will need to add information about your potential savings for accurate results to be generated. Let's go through each step together, beginning with your savings plan.
Step 1: On the first line of the calculator you should identify when you would like to start your savings. Here you may decide how many years you would like to wait before putting your plan into action. Then, add the starting balance of your savings account to the second line.
Step 2: On the third line of the calculator you should add the amount of time you have to grow your savings, and the annual rate of return on your savings account on the following line. Tax-free savings accounts have a nominal return of 0.25%; while investments diversified among stock, bond, and cash incentives can provide annual returns up to 8%.
Step 3: You should identify the payments you can make to your savings account, along with how often you will be able to make the payments.
Step 4: Proceed to view your savings plan results
Your delayed savings plan results
Once your saving approach has been completed the system will generate reports in the form of smart prompts, charts, and tables to assist in your understanding of your potential savings.
Immediately below the calculator inputs, there is a prompt that will notify you how much it may cost to delay your savings.
Directly below the prompt are your two integrated reports. The first report is a savings plan chart, which shows the growth of your savings accounts over a specified number of years. You may see your savings if you start now in blue, or your delayed savings in green- giving you a clear idea of your savings account potential.
The second tab allows you to see a breakdown of your saving balance by year if you start saving now, or if you choose to postpone. This report will enable you to compare different the different savings approaches easily. It may show you if you will need to start saving sooner, or later, to meet your milestones.
Without this essential information, you may never know your savings potential, or exactly how easy it may be to set up a financially secure future. Remember to bookmark this page or save it to the home screen of your smart phone or tablet to have access this great tool as your finances change. By using the share feature, you may also promote us on social media to help others build a successful saving strategy too!