Save For What? Six Savings Objectives That May Apply To You Today

Most people have to understand that they should be adding in the future, but may lack a clear sense of what to be saving for and how. Here are the answers:

1. Retirement. Even if you never wish to retire, you should plan for the possibility that you will either change your mind or not to have the option. If you are able to be 102, do you really think you’ll still be working? Start saving for retirement using your 401k at work or an IRA at your bank or stock brokerage. This savings should be held sacred, never to be touched until retirement. Tax laws allow you to use these funds for a down payment on a home under some circumstances; be cautious with that! Make room in your budget to continue saving for retirement.

2. College. You’ll want your children to attend college, to gain the most out of their lives. It takes good grades, self-discipline and a shocking amount of money. Start increasing their college education at the later of the day they are each born or today! You can get some small tax advantages by using 529 plans that protect the earnings in the accounts from taxes; check the house.

3. A new car. It certainly sounds a lot more fun to be saving for a car than for retirement. You can conduct a new car. If you buy a new car with the value of your trade in combined with your savings rather than borrowing the money, driving the car will be a lot more fun. You don’t like to work for your car—that’s slavery. You want your car to work for you!

4. Vacation. Can you imagine paying for a vacation five or ten years after you took it? That can’t be fun, but plenty of people make when they put the vacation on a credit card. The vacation is over in seven days, but the misery of paying for it can go on for years. If you save for a vacation instead, the trip will be more fun and there will be no fiscal hangover!

5. Rainy day. By making savings for a rainy day, separate from your original car and a vacation, you’ll protect those dreams. If you suddenly need another transmission for the car, that could set back your plans to buy a new car a year or more if you don’t have some rainy day money around. Optimally, your rainy day account would have enough to cover a year of expenses so it can cover an extended period of unemployment.

6. Other. There is no reason on earth not to save up for other things you want or for no reason at all. Having money will give you the power to see accomplished in the world. Keep saving!