By Taylor Kovar
Hi Taylor, My husband and I are trying to figure out some savings goals for the future and really don’t know where to start. House, retirement, new car, emergency fund, etc. Any guidance? – Maria
Hi Marie – I love this question! As one half of The Money Couple, helping married people figure out how to best live their financial lives is a big part of the work I do with my wife. While everyone has a different situation and different needs, there are some universal steps we can all take.
Emergency fund. If you don’t have a mattress of some kind, you have to start there. Save enough to cover a few months of living expenses so you don’t go into too much debt when the unexpected happens. People skip this step all the time and almost always come back to bite them. If you have a safety net in place, something like a layoff or a downturn won’t blow up all of your long-term goals.
Retirement. If you have a 401(k) through work, that’s fine, but it’s really not enough. An IRA is another way to do it! Once you start saving money for retirement, it won’t seem like a huge savings goal but rather a manageable monthly amount. It’s really important to start now and get in the habit of maxing out that IRA each year so your money can grow and you don’t have to worry about it when you’re older and start thinking about your life after work. Cars, houses and vacations are more appealing when you first start saving, but those retirement funds should be a top priority.
House. You don’t have to buy a house. If renting makes sense for you and your current situation, and you have your savings and are saving them for retirement, that’s fine. At the same time, you may be able to save for a down payment and then pay a mortgage that isn’t much more than your current rent. Perhaps most importantly, simply opening the conversation about saving for a home can answer many questions about your future. Do you want to stay where you are? Do you want to continue renting and buy a vacation home that you can rent? Do you want a house so you can start a family (which leads to a lot of other savings questions)? Even if you don’t buy a home, those questions are worth considering.
You may have to start with a few smaller goals than you expected, but it’s all part of the process. Make sure you’re setting yourself up for success, and the rest of the pieces will fall into place. Good luck!
Disclosure: The information presented is for educational purposes only and is not an offer or solicitation for the sale or purchase of any specific securities, investments or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any of the strategies discussed in this document. To submit a question to be answered in this column, email Question@GoFarWithKovar.com, or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.
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