You know you should be saving your money, but do you know why? Here are ten things you should be saving for, just in case. Don’t be caught off guard! Knowing what you need money for will make it easier for you to save.
1. Paying off debt.
No one wants to be in debt their entire life! Sure, that credit card was supposed to just be for emergencies, but you started using it here and there, and then you realized you couldn’t pay the monthly bill. That’s ok — after all, that’s what credit cards are for. But don’t let your debt accumulate. Interest rates will make your fees skyrocket, and before you know it, the amount you owe will seem impossible to pay off. Instead, pay off a little per month. Try to meet more than the minimum due, if you can fit it into your budget.
2. Medical emergencies.
You’re healthy as a horse, right? Still, you never know when the flu is going to knock you out, or when you’ll get in a car wreck and have hospital bills to pay. You don’t want an unexpected illness or hospital stay to wipe out your savings, and you don’t want to be in debt or struggle to make ends meet just because of a medical problem.
3. Periods of unemployment.
Financial advisors recommend having enough money saved to live for three to six months without any additional income. Go ahead and figure up your monthly expenses, multiply them times six, and see how much of a cushion you need to have. Are you close? If not, go ahead and add a bit into your current monthly savings that will allow you to save up this money. If you can, save even more — the more money you have in savings, the longer you’ll be able to live without a job. This means you won’t have extra financial stress when you’re unemployed, and can take your time to find the job that fits you best. It’ll be worth it so you won’t find yourself struggling if you unexpectedly lose your job!
When you’re in your twenties and even early thirties, retirement seems far away. In reality, it’s never too early to start saving for retirement. Think about it – this is money you’re putting aside so you can live more comfortably later! You won’t have to depend on Social Security income because you’ll have your own money put aside.
5. Buying a car.
It’s not too expensive to buy a car because you don’t have to pay for it all at once (but wouldn’t it be cool to buy a car in cash?), but the down payment and monthly bills can add up. If you don’t have it figured into your budget, then buying a car might set you off course. You should have money in savings that could be used for a downpayment and monthly payments on a car, just in case something happens to your current ride.
6. Purchasing a home.
Or an apartment, or a condo, or a farm! Sooner or later, you’ll probably find yourself ready to settle down and have a stable living situation, instead of renting and moving every few years. You don’t have to pay for a home flat out, of course, but you’ll need a considerable amount for a downpayment. Also think about how you’ll need to have good credit and savings in order to get a loan.
7. Home and car insurance and repairs.
Once you’ve saved up for that car and that home, you’ll have a lot of additional expenses! You’ll need car insurance, home insurance, you’ll have to pay property taxes depending on where you live. Your car will need tune-ups and your house will need repairs and maintenance. You’ll need money in your savings account so your water heater busting or your muffler falling off won’t leave you frantically searching for a cheap, easy solution.
There may come a time in your life when you’ll want to go back to school and get a master’s degree or a special certificate. As a working adult, it’s possible to get tuition assistance, but not guaranteed. Instead of having to decide between going back to school or staying in the same dead-end job, wouldn’t it be great to know you have the ability to pay for your education? And if you never go back to school, this money can go to your children’s college funds!
9. Investment properties.
Whether you already have your own house or not, having an investment property is never a bad idea. It could be a rental house for students near the university, or a beach house you rent out in Florida – these properties will provide income with minimal effort. Sure, you’ll be responsible for repairs and will have to screen your tenants to ensure they won’t damage the property and leave, but if you charge a bit more than what you have to pay each month for the mortgage and upkeep, you’ll make a nice profit!
10. Caring for elderly family members.
You don’t want to think about it, but there may come a time in your life where you’ll have to take care of elderly family members. Grandparents, aging parents, aunts, uncles — who knows who will need help as they get older? You don’t want to be in the helpless position of turning down those who need you, so make sure you have savings to help them out. This could include groceries, living expenses, medical bills, in-home nurses or even helping move them to an assisted living home. These transitions are going to be difficult enough emotionally; you might as well try to lighten the load financially.
Featured photo credit: 401 (K) 2013 via flickr.com