Savings Plan

If you are able to minimize your expenses and allow yourself to be left with available funds after everything is paid, what are you doing with that left-over money?

Emergency Fund – should be enough to maintain essential household expenses for no less than 6 months. Think of this as long term savings … something that is not easy to get to (preferably in an interest bearing account) but not so inaccessible that you cannot access it immediately if an emergency does arise.

Retirement – if your employer offers a retirement plan, start having the money deducted from your paycheck. If you employer “matches” to a certain percentage have your payroll deduction be the same percentage … what that means is your employer will essentially be giving you extra money for your retirement! If your employer doesn’t offer a retirement plan, start looking into an Individual Retirement Account (IRA) or Roth IRA.

College – if you have a child (or children), the idea of paying for college can be a daunting task. It’s never too early to start saving. You can look into college savings plans, like a 529 plan or a college savings trust.

Investments – if you have been saving regularly, have a comfortable emergency fund saved up and are contributing the most you can to retirement, it might be time to look into investing some your money. Never invest more than you can afford to lose.

Goals – would you like to save up to buy a house? Or maybe you would like to pay your current home off in less time than you have a mortgage on it.  How about taking the family on a vacation?  What about buying a new car?  Saving for your goals means being able to pay without using a credit card or paying interest.