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How to Create a Long-Term Savings Plan

In an ever-changing financial environment, having a well-structured long-term savings plan is essential for achieving significant financial goals. Whether you’re aiming to buy a house, add a vehicle to the garage, save for education, build retirement savings, enjoy a well-deserved vacation, or pursue other important goals, a long-term savings plan acts as a clear path to success.

In this article, we’ll explain the process of developing your own long-term savings plan and detail some powerful savings tools and other resources available to you today from American National Bank.


Set S.M.A.R.T Goals

Developing realistic goals is a key component of any useful long-term savings plan. One useful approach is the S.M.A.R.T criteria:

SPECIFIC: Be precise about what you want to achieve and set priorities for multiple goals.

MEASURABLE: Have an accurate means of measuring your savings progress.

ACHIEVABLE: Ensure that your goals are realistic.

RELEVANT: Make sure that your goals are genuinely relevant and align with your broader goals.

TIME-BOUND: Establish a clear timeframe for achieving your financial goals.

Once your goals have been outlined, it’s important to calculate how much you will need to meet your savings goal. Be realistic with these numbers and account for potential future changes in income, collateral, and expenses.


Include your savings goals in your budget

If you haven’t already done so, it’s time to develop a comprehensive monthly budget and include your savings goals in your list of monthly expenses. If possible, cut back on other expenses to meet this specific savings goal each month.

Keep in mind that monthly budgets are not set in stone; adjust your budget as your financial situation changes over time by accounting for increases in income that may help you meet your financial goal sooner.

Need to open a savings account or set up an IRA account? Connect with American National Bank today and discover how easy it is to get set up for smart saving.


Automate your savings

Discipline and diligence are essential to the success of any long-term savings plan. Take advantage of automated transfers from your checking account to set aside a specific amount of funds to be deposited to your savings or investment accounts every month.

Looking for other innovative ways to set aside savings each month? Consider American National Bank’s Round-Up Savings Program which automatically transfers the “change” left over from transactions performed with your American National Bank debit card to your savings account at American National Bank.


Open a CD account to grow your savings

If you have several years of time built into your savings plan, a high-interest Certificate of Deposit (CD) can help grow your savings steadily over a specific period while providing several important benefits:

  • Guaranteed Returns: CDs offer a fixed interest rate for a predetermined period of time, typically ranging from a few months to several years.
  • FDIC Insured: CDs are protected by the FDIC up to the current statutory limit of $250,000 per depositor per insured bank.
  • Predictable Earnings: For long-term savings plans, the fixed interest rates of CDs allow for easy calculation of earnings by the end of the CD term.
  • Low Risk: CDs carry minimal risk compared to other investments like stocks or bonds. With a secured principal amount and a guaranteed interest rate, CDs are a favorite financial tool of conservative investors.
  • CD Laddering: Dividing your savings into multiple CDs with different maturity dates permits you to reinvest your funds at the current interest rate or use the funds as needed, allowing you to access part of your savings while benefiting from higher interest rates associated with longer term CDs.

A long-term savings plan matched with patience and commitment is a powerful combination for achieving a variety of financial goals. Connect with an American National Bank representative to get started on smart saving today!