Saving: You know you should be doing it, but what do you need to be saving for exactly?
Sometimes if we know what it is we’re saving for, it’s easier to do! Here’s a list of things that you should consider saving for:
An Emergency Fund
Things happen! Hopefully not, but sometimes we run over a nail and need a new tire, sometimes we need to make a trip to the emergency room, sometimes our house floods. Things that fall under “emergency fund” are things that are truly unforeseeable. Financial expert Dave Ramsey suggests that you have $1000-5000 in the bank at all times to be able to cover incidents such as these so that they don’t ruin your financial situation when they come up.
If you make an income, you should be regularly contributing a small percentage to a retirement fund, such as a Roth-IRA or a 401k. Here is a calculator to see how that money grows over time.
If you have children, you might also want to do your best to start saving for their college education. Every bit helps! Talk to a money management professional about how best to do this and to maximize your investments.
You might be lucky enough to have a brand new car, but whether your car is 20 years old or just-off-the-lot, you’re going to need to have maintenance done and, eventually, will need to replace the vehicle. Start putting away money each month for this! It’s going to happen!
Christmas comes on December 25th every year! Instead of you scrambling to find money at the end of the year, set aside even $20 every month and you’ll be glad to have the extra money when the holidays come around!
Other things you might want to think about saving for:
- Possible unemployment
- Future investments
- Exciting opportunities