5 Things to Start Saving For Right Now
With the holidays behind us (for a while), and tax refunds arriving, you may find yourself with a little bit of extra cash. Whether it’s a few thousand dollars, or just a couple hundred bucks, you can take the opportunity to get a head start on saving for future needs. Keep in mind that building savings is the best way to create a secure financial future for yourself and your family!
Here are 5 things you should start saving for right now – or if you’ve already started, remember to add extra cash towards your goals whenever possible.
1. Your Home
Whether you’re planning on buying a home, or you prefer renting, there are always costs involved, and having a plan in place to pay for home-related expenses when they arise can save you from incurring unexpected debt.
If you’re planning to buy a home, saving for a down payment can mean smaller mortgage payments – and less interest paid over time. If you’re a renter or already a homeowner, you will still want to have some money saved for items like furniture, appliances, or home improvement costs.
Being in debt is no fun. If you can plan ahead and have a stash of savings to cover these types of expenses, it gives you a lot more control over your financial outlay.
You’re probably already aware of the high cost of a college education (check out some of our previous college planning posts for more on this), so if you have children, time is of the essence! The sooner you start saving, the better.
But what if your kids are already in high school? In that case, you may not have a lot of time to save, but be sure to check with one of our college planning consultants – they may be able to share with some advanced strategies to help you save more money on college costs than you’d expect.
Like it or not, emergencies and accidents can, and do, happen. Everything from a broken clothes washer or dryer, to a medical emergency, a fender-bender, or a loss of income, can set you back – sometimes substantially, and depending on your financial stability, can really cause a lot of financial hardship for some families.
You probably have insurance, but it doesn’t always cover everything that can go wrong. Make sure when something like this happens that you have options. Make it a priority to expect the unexpected, and try to establish an emergency fund of at least 6 months of living expenses that you can access when or if needed. (Note that if you Bank On Yourself, your B.O.Y. plan makes a great emergency fund!)
If you’re younger than 45, retirement might be the last thing on your mind, but the years will fly by faster than you expect, and before you know it, it will be just a few short years away! If you don’t make it a priority to plan ahead for your retirement years, you may find yourself, like the millions of seniors now seeking jobs, needing to work a lot longer than you had intended.
Even if you’re contributing regularly to an employer-sponsored retirement plan, if you have any extra funds, you should consider diversifying your retirement savings into other vehicles as well. It can be a great idea to contribute as much as your employer will match into your employer’s plan first. But outside of that, you may also want to build some savings in a safer place, since most employer-sponsored plans are market-based.
A Bank On Yourself plan, or some types of annuities, can be a good way to grow and diversify your retirement savings, and put a portion of your nest egg someplace safer, where it’s not subject to market fluctuations. After all, while the market may be doing great right now, it’s notoriously unpredictable, and you never know if it is going to crash right before you may need those retirement funds!
If you have any questions on these safer kinds of options, feel free to request a free financial analysis with one of our advisors.
Don’t forget to treat yourself now and then! Whether it’s the latest phone or electronic gadget, a bigger TV, or a relaxing vacation at a beach resort, it’s okay to spend some money on fun stuff once in a while.
However, going into debt for these things takes a lot of the fun out of it – or at least adds a helping of unnecessary worry on top of it!
Set aside a savings fund for play, and then you can relax and enjoy your new toy or fun experience without having to worry about debt payments hanging over your head for the next 6 months. We promise – you’ll enjoy life a lot more that way!
If you would like to discuss options for getting started with saving for these areas or other things, we’re always happy to help! Just contact us to speak with an advisor.