Save money. It’s something we are told to do from an early age. Save your allowances, save your tooth fairy money, save your paychecks, etc. It’s ingrained in us from childhood. But so many of us as adults aren’t great at it. It’s taken me years to become a saver. Years to see savings as a good thing and see goals being met. It’s insanely rewarding to see those accounts grow. I want to talk about 8 things you should be saving for and how to do it. I feel like so many of us want to save but may not know how.
8 Things You Should Be Saving For (And How To Do It)
What to save for:
- A house: To me, this is one of the more obvious things to save for. Someday you may want a house (or a bigger house).
- Travel: One of the more FUN things to save for. I love having a separate account just for saving for travel.
- Emergencies: Having a 6-month emergency savings account is recommended. This would include all your bills and a little extra.
- Education: For you or your children, depending on where you are in life.
- To pay down debt: If you have any debt to pay down, you can be saving for this. Skipping that extra Starbucks could help you not gain more interest on debt you need to pay down!
- A rainy day: For when you need a pick me up, want to treat yourself or do something fun!
- Home repairs: Kind of like an emergency fund, home repairs are bound to come up if you own a house. For example, our hot water heater went out on Christmas Day last year, and we had to have it replaced. Not something you want to be shocked by financially.
- Retirement: In my opinion, this is the MOST important thing to save for. There are so many ways to do this. You can have an IRA, 401K, savings accounts etc.
How to do it:
- A percentage of each paycheck: This is one of the easiest ways. Take 10% of each paycheck (or a number that makes sense for you) and put it right into savings. Almost as if you were paying a bill.
- Make your goals realistic: This is so important. Make your savings goals realistic or you’ll never reach them. If your goal is to put 50K in savings in two months, you probably won’t make it happen. A goal to save $100 each month is more attainable and realistic.
- A monthly transfer: Similar to the first point, have a certain amount automatically deducted from your bank account and into a separate account each month. This way you don’t even have to make an effort.
- A side hustle: This is a great way to make extra money that you can put directly in savings. If you have a side hustle, along with a regular income, vow to put all the money from your side hustle directly into savings.
- Max out your 401K: If you work a traditional job, chances are you have a 401K or some sort of retirement. If your company matches it up to a certain percentage, I suggest maxing your end of that out! Whatever is the highest they will match that’s what you should put in. That’s a great way to save for retirement as mentioned above.
- Have a visual reminder: A chart, a graph, a picture of what you are saving for, a vision board, etc. Something visual can help you remember your goals.
- Use the 50/20/30 Rule: I saw this on Forbes years ago and it’s always stuck with me. Essentially it means 50% of your budget goals towards essentials like food, water, housing, and transportation. 20% goals towards savings, retirement, and your debt reduction. Finally, your last 30% is flexible spending, meaning you can use it for anything not in the first two categories. To me, this is a low-pressure way to save. You are still getting your wants and your needs, and it’s based entirely on your income. You can pay bills, add to savings and retirement, pay down debt and still have a life!
Savings is one of those things that we are almost always doing. So hopefully some of these tips gave you some new ways to save that will seem a bit less daunting!
Do you have anything to add to my 8 things you should be saving for? I’d love to hear them!
This post was originally published in 2019 and has been updated for 2021.