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The savings bucket list: How to tackle 1, 5 and 7-year goals

You want to save up for something big—a European vacation or kitchen renovation—and you’ve got a few years to do it. Because you have to have a goal, right? The tricky part is coming up with a savings plan you can actually stick to—and knowing where to invest the money. Whichever of these financial goals you’re aiming for, we’ve come up with a game plan to keep you on target.

Worry-free wanderlust

What’s worse than returning from vacation with sunburn? Coming back with multiple credit cards in the red. That takes more than a few days to go away. To avoid running up your credit card bill, choose a budget first and then plan your vacation around that number—letting price point guide your choice of hotel and daily spend rather than vice versa. For a $2,000 vacation, 10 paychecks in the future, set up $200 auto payments from your checking to savings account.

Say “I don’t” to debt

Your child’s wedding may not cost $40 million like Meghan and Harry’s, but it could still add up to a princely sum: The average price was $33,391 in 2017, according to The Knot’s Real Wedding Study. Let’s say you offer to foot the bill for what is typically the biggest expense—the reception. Whether you find something for $2,000 or $20,000, you probably have about a year to supplement any savings you’ve already banked for the big day. Many venues offer a small discount if you pay in advance—so it may make more sense to negotiate a series of installments than to deposit the money in a savings account.

Retire from the hassle of saving

These days, it’s up to you to take charge of your retirement planning. That means you’ll need to sock away about 12% of your pre-tax paycheck. (That could be 8% from you plus a 4% employer match). If you aren’t quite there yet, consider increasing your contribution rate by a single percentage point: 1% of a $60,000 salary is just $11.54 per week—less than a takeout meal. More plans are adding ways to automatically increase your contribution rate each year, so you can kick your savings up to the recommended rate without even thinking about it.

Celebrate 50 without feeling it

The big 5-0. You’ll start thinking about your half-century celebration around the time you turn 49. And that gives you a solid year to save for a fitting fiesta (you’re only 50 once!). Decide how you’d like to commemorate 5 decades of you—whether it’s a yoga retreat, day of pampering at a spa, or blow-out bash with your oldest friends—and then siphon off your spare change into a jar labeled “birthday.” Of course, the world has changed a lot during your 50 years, and coins aren’t the only kind of “small change” any more. Look through your debit transactions and calculate how much actual change you generate in a typical week. Eleven cents here, 79 cents there; you’ll be amazed at how much it adds up. Whatever your total, set up a weekly transfer to your savings account for that amount. A couple unnoticed dollars of spare change per day will grow to more $700 in time for your 50th.1

Time for a revamp? Think small

Depending on your local property market, you can expect to recover up to 80% of the overall cost of a kitchen renovation. But a series of smaller-scale, less-glamorous projects may be a better investment: Adding fiberglass insulation to your attic, and replacing your entry door and garage door will actually add more value, in terms of cost recouped.Because you can do one project at a time, the cost is more manageable. Just remember to hold on to receipts—you may be able to deduct home renovation expenses when you sell your house.

If gleaming countertops still haunt your daydreams, decide a ballpark sum you’re willing to spend on your kitchen renovation, say $10,000, then set up a five-year plan to save around $2,000 each year. Schedule your deposits for those times you plan to receive a windfall (a tax refund or work bonus) and use that for your renovation bucket. Are you willing to take on a low level of risk (i.e. end up with less than $20k)? You could open a brokerage account and invest in a bond fund3, where there’s more earning potential than your unadventurous savings account.

Hot property

You’re still paying off your mortgage, but it’s never too early to plan ahead for that second home in Naples (or Naples, Fla.). In fact, the earlier the better. If you’re a fledgling snowbird, a vacation home gives you somewhere warmer to roost, and maybe rent out in the meantime. Figure out when your mortgage should be paid off, because that’s when you can afford to start on your next one—let’s say you expect to pay off your mortgage 7 years from now. In the meantime, see how much you can save toward the down payment on a second home. One possibility: Consider doing so through a brokerage account—moving from moderate to conservative risk as you near your goal date.

Lessons in investing

Education costs are skyrocketing above inflation, so your child’s college fund needs to be inflation-busting too. A plain old savings account just won’t make the grade. A 529 college savings plan lets you invest your contributions in growth-oriented stocks. Many plans offer funds that automatically make your portfolio more conservative the closer you get to the year your child starts college. Keep your kids involved, tracking the performance of your investments together—and to encourage them to contribute money from their summer job, match whatever they put in, dollar-for-dollar.

From CD to SUV

Maybe your mileage is adding up, or your family has outgrown your wheels. If trading in your old car for a new model means driving off with a lease, you’re likely to end up worse off. And interest rates on dealership loans can rival those of credit cards. One option would be to set a savings goal for five years out and put your first chunk in a 5-year certificate of deposit at a bank paying a competitive interest rate. When you’re 4 years from your goal, deposit your savings in a 4-year CD, and so on. That way you’re guaranteed to earn a fixed interest rate, usually better than the best savings account. At the end of the 5 years you can cash them all out and head for the showroom. By paying in cash for a car that meets your needs, you may be able to negotiate a better deal.

A lot can happen in 5 years…

or even one year. You might change jobs, face unexpected challenges, or shift your priorities. That’s why you need to be flexible with your plan. If you’re saving for multiple goals at the same time, figure out how much you’ll need to set aside each year, set up automatic payments, and tighten your budget accordingly. The key thing is to make your goals realistic and achievable, based on what you think your income will be over the next year or few years. Learn more about where to invest for short, medium and long-term goals.

1Assuming 0% interest over a 1-year timeframe.

2“Remodeling 2017 Cost vs. Value Report” 2017,

3“Money Market Funds,” U.S. Securities and Exchange Commission, accessed June 2018,