Why Your Main Financial Goals Don't Really Change as You Age
You may see the title of this post and immediately think we’re crazy; we’re not going to say you’re wrong. After all, as you age you have to worry about kids and all the costs they bring, higher income, and buying a home. Those are some major expenses!
But just hear us out. You can have financial obligations – kids, a home, etc. – but no matter what stage of life you are in, there are two financial goals you are always striving to meet: having enough money saved for emergencies and having enough money saved for retirement.
Your Emergency Fund
How many people do you know that were laid off during the 2008 recession or had their hours reduced? Even now, jobs aren’t sure things regardless of if you are in your 20s, 30s or 40s. Having an emergency fund in place allows you some wiggle room if you lose your job or face another large, unexpected cost like auto or home repairs.
So, what does an emergency fund consist of? Six months of living expenses stowed away in safe and secure Lincoln Savings Bank savings account. Six months of expenses, may seem like a lot to have on hand and a mighty lofty goal to reach. By saving money from each paycheck over time, whether you’re a recent grad or 40-something parent of two, can help you gradually build toward your goal.
Generally, the younger you can start the better. Twenty-five year olds with no kids have way fewer responsibilities than a married 30-year old with a child.
Your Retirement Fund
The 2008 recession also did a number on the retirement accounts of millions of Americans. That’s why, just like your emergency fund, it’s important to start early, though for a different reason.
Compound interest is a beautiful thing, especially when it comes to your money for retirement. The longer you have money in an IRA or 401(k), the longer it is boosted by compound interest. Also, if your employer offers a match on 401(k) contributions, make sure you are taking full advantage of it. It may mean less in your paycheck now, but that’s a sacrifice you should be able to make to live better later.
Yes, while there may be other financial needs and responsibilities that come along during life, two that you should always be working on are your emergency and retirement fund. One ensures you can make it through tough times now, while the other allows you to live better in the future.
Lincoln Savings Bank helps you stay on track with both of these goals by offering savings accounts, CDs, IRAs and other ways to save for the present and down the road. Come see us today to learn more!
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