You may feel that you’re in a place that you don’t need to worry about having a savings account, but you’d be surprised! There are always things to save for. On the other hand, you may be someone living paycheck to paycheck and may wonder what you should be saving for. Either way, there’s always something to save for. The following are just a few things you might need to be putting away money for each month.
Retirement – Everyone needs to save for retirement. Even if you can’t save a lot, every little bit helps. This is especially true if you’re young. The sooner you start saving for retirement, the better. Look into opening an IRA and starting a 401k plan at your place of employment. Some employers will even match your contribution to a 401k up to a certain percentage. Not taking advantage of this is literally passing on free money.
House Repairs – If you’re a homeowner, you want to make sure you have a savings account devoted to home repairs. Home repairs can be something as simple as replacing a doorknob or something as expensive as needing a new roof. You want to make sure you’re putting back money from each paycheck to save for upcoming repairs.
Emergencies – It might be a car repair or a trip to the emergency room. The unexpected happens to everyone. You want to make sure you have a savings account devoted to any emergencies that occur. Continue to build the account until you’re reached what you would make in a 3 to 6 month period. Should you become unemployed, this account can help you survive until you find a new job.
Read more about why you need an emergency fund here.
College – If you have kids, you want to make sure you’re saving for college. There’s a 529 plan that will allow you to take advantage of certain tax breaks. The exact tax breaks you receive will depend on where you live. However, the way it works is the money is invested in hopes that the funds will grow by the time your child is ready for college.
Christmas – Christmas is another great thing to save for. If you constantly find yourself in mountains of debt after the holidays, start saving for Christmas immediately. For example, if it’s December 26, start saving for next Christmas. Choose a number you can afford to spend, and create a budget based on who you need to shop for and how much you can spend on each person. Then, determine how much you need to save each week to reach that amount.
Something You Really Want – Last, but not least, instead of putting something on a credit card, save for it. This will help prevent you from making impulse purchases and prices may fall by the time you save up the money. Create a savings account for fun purchases and set aside some cash each month for those expenses. It will feel amazing to pay for them in full when you finally have enough to buy them!
It doesn’t matter where you’re at in life, you want to make sure you’re saving. It might be for retirement or your child’s college expenses, or even the upcoming holidays. Either way, make sure you have at least one savings account for the things you’ll need in the future.
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