We frequently speak of saving for the future while normal expenses, debt, and desires for immediate gratification often swallow all of our income. However, many of the best things in life require us to save money in advance. Setting aside even a small amount of money now can make a huge difference later. Let’s take a look at some of the things you may want to start saving for now:
- Retirement: This is a fairly common goal in relation to savings, yet many people do not take saving for retirement seriously. It is important to begin saving for retirement as soon as you can. Ideally, you should start saving in your 20s, as soon as you have a regular income. Taking into consideration compounding earnings (what you save this year is increased based on what you saved last year), a few years’ distance can make a large difference in the amount of money you end up with when you decide to retire.
- Travel: Whether you are taking the kids to see their grandparents, or you and your sweetheart want to explore every continent, travel is a great way to broaden your horizons, experience new cultures, and admire the world’s many beauties. However, it can be quite costly. Map out trips you would like to take and then budget for them, based on an amount of money contributed to your goal each month. This will not only make the trip a reality, but less stressful when you do take it, as you know you can afford it.
- Children’s Education: According to The College Board, in 2013-2014, the average cost for an in-state student at a public institution was almost $9,000 per year, while an out of state student at a public institution was over $22,000 per year. Encourage your children to work hard to qualify for scholarships, academic, athletic or otherwise. There are also grants and loans available to assist with academic costs. But you can also start saving now, as every little bit can help chip away at the high cost of higher education.
- Expenses of a Growing Family: If you are planning on starting a family or increasing the size of the one you already have, there is much to consider financially. There will likely be need for a larger home, perhaps a larger or more family friendly vehicle, and the increase cost in food, clothing, activities, healthcare, etc. Taking this prospect a month at a time can drastically decrease the amount of stress during a pregnancy or adoption.
- Vacation Home: There are many reasons to consider the purchase of a vacation home somewhere in your future. A vacation home may be a great investment, it could save you money if you frequently vacation to a certain location, may simply serve as a second home, or give you a home closer to loved ones where you may eventually retire. When the time comes, in addition to being prepared financially, you will want to be aware of strict lending standards and other helpful pieces of information as provided in this article, to help you qualify for a second mortgage.
- Periods of Unemployment: While most of us strive to have stability and job security, there is always the risk of a period of unemployment, both those of our choosing and those we are forced into. These times can be short lived, but are often longer than expected, as new employment can take time to secure. Make sure you have enough money saved so that you can support yourself and your family for months at a time, should such an unfortunate occasion arise.
- Unexpected Emergencies: Finally, there are always those unexpected emergencies that come up that can put quite a dent in our financial situation. Even if you have insurance, medical emergencies such as surgeries or treatments for an illness can still cost thousands of dollars. Home repairs like a new roof or auto repairs (or replacements) can also throw our finances for a loop if we are found unprepared for such an occasion.
While there are many good things to be saving up for, as well as times of trouble that can sneak up on us, planning in advance and being prepared financially can help us face these situations with confidence. Rome will be visited, the appendix will be removed, your family will be safe, and retirement will be enjoyable, all because you started saving small amounts now.
Author: Alyssa Craig