Once you've set up a savings vehicle, it's a good idea to set goals and make plans. IRA's and 401k's are saving vehicles for the long term and shouldn't be tapped until you retire. There are severe penalties, in most cases, for withdrawing funds before 59 1/2. Setting a goal for how much you want for retirement is a must. Find an interest calculator online and experiment with monthly contribution amounts to get an idea of how much you need to be saving monthly to reach those goals. Make a plan for how you can consistently fund your account by that amount each and every month, tenacity is a must! Increase your monthly contribution when you get a raise, and you won't even lower your take home pay. More saving ideas soon from Finwiz.Friday, May 20, 2011
What are you saving for? Set goals and make plans
Once you've set up a savings vehicle, it's a good idea to set goals and make plans. IRA's and 401k's are saving vehicles for the long term and shouldn't be tapped until you retire. There are severe penalties, in most cases, for withdrawing funds before 59 1/2. Setting a goal for how much you want for retirement is a must. Find an interest calculator online and experiment with monthly contribution amounts to get an idea of how much you need to be saving monthly to reach those goals. Make a plan for how you can consistently fund your account by that amount each and every month, tenacity is a must! Increase your monthly contribution when you get a raise, and you won't even lower your take home pay. More saving ideas soon from Finwiz.
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How about a short term goal like a summer vacation or a new car? How do I save for those? Should I set my goals before I choose the "savings vehicle" or choose the "vehicle" before the goals?
ReplyDeleteI would have a standard passbook savings account with a low minimum balance requirment at a bank or credit union. Draw or add to these as you wish for short term goals.
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