Goal-Based Saving: Your Path to Financial Control [A Method]

Introduction

I know how tricky money matters can get. We’ve got family to look after, festivals to celebrate, and if all this was not enough, we have our own dreams to chase. For me, it’s a lot. And to achieve all of this we need money, and it can only come if we are saving. But saving doesn’t have to feel like a burden. With a little planning, it can actually bring peace of mind. So, hear me out please. In this post I’ll talk about how goal-based saving can help us take charge of our finances.

I’ll keep this simple and practical. No fancy words, just real talk. By the end, you’ll have a clear idea of how to start saving for what matters to you (financial goals). Ready for it?

Let’s dig deeper.

What It Means By Goal-Based Saving?

Goal-based saving is pretty simple and a straightforward concept.

It’s about putting money aside for specific things you want or need in life.

Maybe it’s your kid’s school fees, a new scooter, or even a lavish Indian wedding. Instead of just stashing cash randomly, you give every bit of you money (savings) their own goal based compartments. I call it saving with a purpose. It’s like labelling jars in your kitchen, one for rice, one for dal, and one for wheat, etc. Each has its place.

I remember when my cousin started saving for her daughter’s first birthday. She didn’t have much, but she put away a little every month. By the time the day came, she had enough for a small celebration.

That’s goal-based saving in action, small steps planned much in advance, yielding big results.

But yes, here the critical part is planning in advance. To let our savings built-up, we need to gradually accumulate bit by bit, for which we need time (say a few years).

Why Should We Care About Goal Based Saving?

Money isn’t just about us (self), right? When we say money, we’re often thinking about our whole family. And in India, families can be pretty big.

Plus, there’s always something unexpected, like a sudden medical bill or a festival expense. Without a plan, it’s easy to feel lost. Goal-based saving changes that. It lets you decide what’s important and work towards it, bit by bit.

Take inflation, for example. Prices keep going up, vegetables, petrol, school fees, everything. If we don’t save with a purpose, our money loses value over time. Planning ahead keeps us prepared.

And honestly, doesn’t it feel good to know you’re ready for life’s big moments? Not only that, it also pushes us to think ahead and plan for forthcoming expenses. Thinking about past and present is easy, but its not easy to build a future vision. People who can do it will also see its benefits in their finances.

So, let’s see how to go about it.

Start With Your Dreams and Duties

First things first, think about what you’re saving for.

Sit down with a pen and paper (or your phone), whatever works. Write down your goals. Maybe you want a new TV next Diwali. Or perhaps you’re dreaming of a family trip to Goa in a few years. For me, it’s always been about balancing personal wishes with family needs. It can be a mix of big and small goals. But make it a point that you list is exhaustive. You should not stop only by listing a few big goals.

Include all types of goals. They can be of short-term types, like buying gifts for a wedding, or long-term, like building a house. But, I’ll suggest, don’t overthink it, prepare a list with what comes to mind first.

OK, let me share with you the trick I use for myself, to exclude what’s not important.

If you will try to save for everything, you will likely fail. So pick your most important goals (if including most of them looks impossible), and start saving for them.

In real life, all goals (that we dream about) cannot be achieved.

I always make it a point to include only those activities what matters to me and my family. Most of the listed goals of my life are something which all of us understands and agree to. It is possible that some goals are more important for my kid than to me, but at least we all agreed that it should be listed in our future goals.

Remember, in our culture, family often comes first, and that’s okay. So, be real about your priorities.

Put a Number and a Date to It

Once you’ve got your goals, let’s get specific. For each one, ask these two questions:

• How much will it cost?
• When do I need the money?

Say you want a phone worth Rs.40,000 in six months. Or maybe your child’s college fund needs Rs.5 lakhs in 10 years. Rough estimates are fine to start with.

I learned this the hard way. A few years back, I wanted to gift my wife something nice for our anniversary. I didn’t plan properly and ended up short. If I’d figured out the amount and timeline earlier, it would’ve been smoother.

So, trust me, this step makes a difference.

Look at Your Money Flow

Now, let’s talk about your income and expenses.

• How much do you earn every month? Add up your salary, any freelance work, or even rent from a property.
• Then, list what you spend, rent, groceries, EMIs, petrol, and whatever you give to your family.
• Subtract the spending from the earning. What’s left is what you can save.

For instance, if you make Rs.100,000 and spend Rs.80,000, you’ve got Rs.20,000 as your savings to play with.

If your income jumps around, like mine does sometimes when I take up extra projects, use an average from the last few months. It’s all about knowing where you stand.

Decide What Comes First

Not every goal can get all your attention at once.

Some things are urgent, like fixing a broken car engine. Others, like a vacation, can wait. In most families, we’ll put health and education ahead of luxuries. So, pick your own priorities. There will always be somethings which will be more important and urgent than others. Group such activities together.

How to do it?

Talk to your loved ones about this. What feels right for you? Maybe supporting your parents is non-negotiable, but that new gadget can wait.

Ranking your goals helps you focus your money where it’s needed most.

Divide Your Savings Smartly

Take that leftover money (savings), say it is Rs.20,000, and split it between your goals.

Let’s say you need Rs.60,000 for a festival in 12 months. That’s Rs.5,000 a month.

For that Rs.5 lakh college fund in 10 years, it’s about Rs.4,200 a month. If there’s still cash left, put it towards something else.

But what if the numbers don’t add up? That’s normal. Adjust. Maybe save less for one goal or stretch the timeline.

I once had to delay a trip because I chose to help my father for his relocation. It’s about making it work for you.

Bring The Plan To Action

Time to put your plan into motion.

You could use separate bank accounts for each goal, one for emergencies, one for a house deposit, and so on. If you’re old-school, even envelopes at home work fine.

• For short-term stuff, a savings account is safe.
• For longer goals, something like a recurring deposit or FD might make sense.

The key is to start.

My friend Anil kept his festival cash in a jar on his shelf. Every month, he’d add to it. Seeing it grow kept him going.

Find what clicks for you.

Set It on Autopilot

Saving gets easier when you don’t have to think about it.

If you’re salaried, set up an automatic transfer to your savings account (or you can start a recurring deposit) as soon as your pay hits. I do this every month, about 35% of my income goes straight to my goals before I can spend it.

If your income isn’t fixed, save a little whenever money comes in. Treat it like a bill you pay to yourself. Read this article about paying yourself first concept.

It builds discipline without you even noticing.

Keep an Eye on Things

Life changes, and so should your plan. Check in every month. Are you hitting your targets?

Maybe your rent went up, or you got a raise. Tweak your savings if needed. I use a notebook to track mine, nothing fancy, just a tally of what’s saved. In today’s age you can simply use Google Sheets on your phone. Even a simple app like Samsung Notes or Apple Notes will do.

Seeing progress is a boost.

When I saved half the money for my bike (back in 2002 – Bajaj Pulsor 150), I felt unstoppable.

You don’t need anything high-tech, a simple record will keep you honest and real about your list of goals.

Fitting It to Our Indian Lives

We’ve got a unique setup here.

Some of us don’t earn the same amount every month. Others send money home regularly. That’s why this method works, it bends to fit us.

If your income varies, save what you can and build a small buffer first. If family duties are big, count them as essentials.

Even small savings count. Rs.50 a day is Rs.1,500 a month. Over a year, that’s Rs.18,000, enough for a decent emergency fund.

It’s not about the amount; it’s about the habit.

A Quick Story

Let me share something real.

A girl girl Priya, just out of her college, earns Rs.25,000 a month. After expenses, she’s got Rs.7,000 left as savings.

• She wants Rs.30,000 for her brother’s tuition in a year, and
• Rs.2,00,000 for her father’s home loan prepayment in five years.

She figured it out, Rs.2,500 a month for tuition, Rs.3,500 for the house. The rest, Rs.1,000 will build her emergency fund.

She make this plan and immediately started three recurring deposits (RDs) for the designated goals. The significance of the RD was that, it will keep accumulating the funds on its own without Priya’s having to worry about it.

It wasn’t perfect. Some months, she saved less. But she stuck with it. She tried to manage by cutting other expenses

Now, her brother’s fees are covered, and the loan prepayment fund is growing.

That’s the power of planning.

Conclusion

Goal-based saving isn’t glamorous. It won’t make you rich. But it’s solid. Read more here about How To Become Rich – A Wealth Building guide.

It’s about knowing what you want, breaking it down, and getting there step by step.

In India, where we balance so much, the above write can work like a tool that respects our reality.

So, why not give it a shot? Pick one goal today. Start small. Watch how it grows.

I’d love to hear what you’re saving for, drop a comment if you feel like it.

Figure this money thing out, one goal at a time.

Have a happy saving and investing.