As Americans, we live in a society that tempts us to live in the moment, spend money on items we don’t need, and not focus too much on the long-term value of our purchases. What we’re not buying for ourselves is a security cushion. According to a 2013 Bankrate poll, about two-thirds of Americans aren’t saving enough money.*
By saving money for emergencies, unexpected home costs, education, vacations, and retirement, you’ll essentially be buying yourself peace of mind and a safety net. Both are priceless. When you have an emergency or home repair, you’ll have a back-up plan ready. If you desire education for yourself or your child, you won’t have to worry about years of paying back student loans. And when you save for vacations and retirement, you can look toward the future with anticipation instead of worry.
So, how do you save for all of these events? A simple savings account that earns interest would work well for your emergency, home, and vacation fund. Designate a certain amount to come out of each paycheck that goes straight to your savings. You could also try a FORUM CommonCents account – with every transaction you make in your checking, a specific allotted amount would be transferred to your CommonCents Savings. To create an emergency fund, start by building up at least $1,000 that you don’t touch. Eventually work your way up to 3-6 months of expenses in savings. To increase your savings momentum, try money management expert Dave Ramsey’s debt snowball. List your debts in order starting with the smallest balance. Then begin paying them off one by one.
To save for education, open a savings account for your child as early as you can and consider starting a 529 plan as well. FORUM even offers a Sprout Savings Account for kids where 10% of deposited funds are matched per calendar year.** For retirement savings, you should be contributing up to the limit of your employer’s match for its 401(k) or 401(b) retirement plan if it is offered. In addition, it’s a good idea to meet with a financial advisor for customized advice. If you would like to meet with a professional on how to plan for retirement, FORUM Private Client Group can help. Call 317.558.6322 or email firstname.lastname@example.org.
**Based on different tier levels. Maximum match per year $100.
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Categories: Finances, Saving