We are well into the new year and I hope you are rocking all of your resolutions. Was saving money high on your list, but already feeling discouraged or a little defeated? I get how easy it is to slip back into old habits, but here are 5 great reasons why you should be saving now.
Here are 5 reasons why you should be saving now.
If you are expecting a bundle of joy in 2017 you may want to start setting aside some cash so you can open a 529 college savings plan. The reason why saving now is so important is time will be on your side. 18 years is a long time to contribute and every dollar counts.
ACTION ITEM #1: Open a 529 College Savings Plan.
If you just started a new job, but not yet eligible in your company’s 401(k) plan, consider opening an IRA (Individual Retirement Account) until you become eligible for your 401(k) Plan. Contribute to your IRA every paycheck so you don’t get accustomed to your take home pay. You can also shift the dollars going from your IRA into your 401(k) plan to take advantage of a potential company match. You will not miss what you do not have.
ACTION ITEM #2: Open an IRA when you start a new job.
I am such an advocate of teaching children about money and saving at an early age. If you introduce your children to saving and budgeting early in life, they will grow up to be financially independent adults.
ACTION ITEM #3: Be a role model for your children.
It is impossible to predict the future and what may disrupt your financial plan. Experts suggest having several months of income aside in case of a job layoff. Additionally, emergency dollars can be used for unforeseen expenses like car repairs or a broken water heater.
ACTION ITEM #4: Build an emergency fund.
If I ask 10 people what their big purchase is going to be, I would likely get 10 different answers. You may be saving for a new car, wedding or a down payment for your first home. Saving will be the same whatever your big purchase may be. At times it will feel ridiculously difficult and even boring. It takes grit and discipline. I like to think of saving as a long-term commitment like running a marathon. If you go out too fast, you are probably setting yourself up for failure. Come up with your own ideas on how to approach saving. What works for you may not work for the next person and that’s okay. Everyone has a different strategy, but have a strategy.
ACTION ITEM #5: Save for a big purchase.
Right now I am taking part in a challenge and I invite you to do it with me. It’s the Save Age Money Challenge + A Charity Wins with Kristy at MoneyBliss.org. It’s a great way to save because Kristy is selecting one lucky participant and will match their savings – up to $500 – and donate it to the charity of participant’s choice. Genius. It’s a win-win in my book!
In conclusion, saving money does not have to be a fight. It does not have to be a constant struggle. And most importantly, it doesn’t have to be complicated. I would love to hear from you. What are your best strategies for saving and/or your greatest obstacles? Feel free to comment.