Savings Plan
Developing a Savings Plan
This video shows you how to build an emergency fund, set realistic savings goals, and protect your credit when life happens.
Voice Over Script – Developing a Savings Plan
“Welcome to ‘Developing a Savings Plan – Your Safety Net Against Emergency Debt.’ Credit isn’t just about how you borrow — it’s also about how you prepare for the unexpected. A strong savings plan keeps emergencies from turning into high-interest debt.
In this lesson, we’ll walk through how much you should aim to save, how to separate short-term goals from long-term goals, and how to automate your savings so it happens without constant willpower. You’ll learn how an emergency fund protects your credit, why ‘pay yourself first’ really works, and how even small automatic transfers add up over time.
We’ll use a simple savings calculator so you can plug in your goal, timeline, and monthly amount to see how your money grows. By the end, you’ll have a clear plan for building a cushion that keeps your credit cards from becoming your emergency plan.”
Step 1: Set Your Savings Targets
Start with two main buckets:
- Emergency Fund: 1–3 months of basic expenses to start, building toward 3–6 months.
- Short-Term Goals: Travel, holidays, car repairs, back-to-school, etc.
List your monthly essentials — housing, food, transportation, insurance — and multiply by the number of months you want covered. That becomes your emergency fund target.
Step 2: Pay Yourself First (Automatic Savings)
Instead of saving whatever is left at the end of the month, flip the script: pay yourself first.
- Set an automatic transfer from checking to savings the day after payday.
- Even $25–$100 per pay period makes a real difference over time.
- Treat your savings transfer like a bill — non-negotiable.
Step 3: Create Digital “Buckets” for Different Goals
Many banks and apps let you create separate savings “buckets” or labeled sub-accounts:
- Emergency Fund
- Car Repairs
- Holiday Fund
- Home Down Payment
Labeling your savings keeps you focused and reduces the temptation to spend it on impulse purchases.
Step 4: Protect Your Savings from Yourself
- Keep your main emergency fund at a bank that is slightly “out of sight” (online-only or separate from daily spending).
- Turn off debit cards or ATM access for that account if possible.
- Only tap your emergency fund for true emergencies: job loss, medical, major car or home repairs.
Savings Goal Calculator
Use this calculator to see how much you need to save each month to hit a specific goal.