Just like setting a goal to finish a college degree keeps you on
track each semester, setting savings goals will keep you on track
to reach your financial dreams. Take some time to think about what
you really want to have in life. Is it a new car when you graduate,
your own home, or peace of mind when life throws a financial curve
ball your way?
The earlier you begin saving, the faster you will reach your
goal! Even if you can spare only $5 out of each paycheck, it's
important to get started. By consistently saving a designated
amount, your savings account will grow, and you will be motivated
to find ways to save more.
Save for emergencies
Unexpected expenses can be stressful and create havoc on your
finances. An "emergency" fund allows you to handle unexpected
expenses, such as a blown tire or a worn out appliance, without
incurring unnecessary debt. A general rule of thumb is to have
enough money in your savings account to cover at least two to three
months of living expenses. This may seem overwhelming, but
remember, it is a long-term goal. Set a short-term goal of saving a
few hundred dollars in your emergency savings account.
Save for your bucket list
Spring break in Hawaii, buying the perfect engagement ring, or
snow skiing in Vancouver…the sky's the limit when it comes to
dreaming. However, your bank account should be the limit when
actually fulfilling those dreams. The anticipation and satisfaction
of saving for your dream will make it even more exciting, and you
will avoid the "aftershock" of a large debt.
Save for retirement
If you work for a company that has a retirement savings plan
(401k) - participate! Many companies offer payroll deduction plans,
and some even match your contributions to a certain level. Take
advantage of the power of compounding by starting your retirement
fund early, and you will be amazed at the result.