How to Manage Your Savings AND Make Your Future Self Proud
In our last post we talked about the important things in life you should be saving for – retirement, medical emergencies, unemployment, etc. After reading that you may have thought, “How the heck do I save for all those things at once?” The answer (for most people) is you can’t. But all is not lost.
By prioritizing your savings goals, you can reach your targets and feel like you’re making progress. Today we’re looking at three items from our last post – your emergency fund, debt and your retirement – as the three things you should focus on first.
How much debt do you have? Total it all up: credit cards, student loans, auto loans, etc. The reason this is important is it will allow you to see what you need to pay monthly to eliminate your debt, as well as how much you can contribute to your emergency fund every time you get paid.
It’s important to keep contributing to your emergency fund, even if it is a small amount. This money is your lifeline if you get sick, become unemployed or transition to a new part of your life. It is your own personal safety net.
Another thing to look at is a company 401(k). If your employer has a match set up and you’re eligible, take advantage of it. Yes, it is more money out of your pocket every paycheck, but you’re contributing to your future, which makes it worth every penny.
Continue looking for ways you can stretch your budget while contributing to your emergency fund. As you are able to pay off your debt, it’s important to take any money that was going toward these payments and put it toward your emergency fund. Your budget is used to that money going somewhere else anyway, so why not pay yourself?
Similarly, any extra money, bonuses, or increases in pay should go toward hitting your emergency fund goal. Again, think LIFELINE. When you hit that amount and have various debts paid off, that’s when you can start looking at the other savings targets from our last post.
Lincoln Savings Bank wants you to remember that saving money is not a quick process. It will take some time and a good amount of willpower. But a year or two from now your future self will thank you for the good financial decisions you made now. Give that person something to be happy about.
Lincoln Savings Bank, member FDIC