Let’s talk about savings. I am always going on about the importance of saving in my 60 Day Budgeting Challenge (I’d love to have you join if you haven’t already!). Saving money is an important piece of budgeting!
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. Or, you may be living paycheck to paycheck and wondering what you should be saving for (and how!). Either way, there’s always something to save for. We’ve put together a list of 7 things you should be saving for below.
Things You Should be Saving For
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. Start with a number that makes you comfortable (like $500 or $1000, depending on your situation). 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.
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.
Don’t have an employer? Here are some ways to save for retirement without an employer.
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. You also want to be saving for things like new furniture or decor, so you’re not impule buying expensive items.
If you have kids, you want to make sure you’re saving for college. We put away some money each month for our kids college funds. Here are some ways to best save for college (tip: start early, but even if you can’t, just start when you can!).
Christmas & Birthdays
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. 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.
Want to never go into debt again for Christmas? Read this article about how to stay out of debt during the holidays.
Something You Reallllly 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. Create a cash envelope 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. Maybe it’s 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.