A lot is going on in the world these days. We’ve got persistent inflation, political turmoil, stock market volatility, a difficult housing market and war across the globe. That’s a lot of uncertainty. It’s also a short highlight reel of the many things over which you have absolutely no control. That’s unsettling, but it can also prompt you to do what you can within your own sphere of influence.
Said another way: Take care of your own business, and everything else will take care of itself (fingers crossed).
The first step on the road to doing that is focusing on your own “why.” What is the thing or the things that are important to you and your family? Here are four examples of what I will call “worthy whys” as you look for your own motivation to save.
1. Save to Pay Down Debt
Debt is a crisis in America. Government, student loan, credit card and even mortgage debt all represent an anchor around our collective necks as we move into the future. But a goal, a plan and an automatic approach can go a long way toward throwing off that anchor.
Let’s say you had $15,000 in credit-card debt in 2014 and made only the minimum payments. Today, 10 years later, you’d still have more than $4,000 in credit card debt!
On the other hand, had you been a bit more aggressive and added an extra $100 per month to your minimum payment (your plan), your credit card debt would have been paid off a couple of years ago — and you’d have saved almost $7,000 in interest! Get fired up and save to pay off your debt.
2. Save to Power Your Kids’ Education
Student loan debt and the cost of education have been hot topics in recent years. Who knows where things will ultimately land. However, as my parents told me when I was growing up — often, when I tried to justify an activity other than studying for an upcoming test — “JJ, hope is not a plan.”
Instead of hoping for a vast sea change in the U.S. higher education system, start socking money away in a 529 college savings plan. The perks and flexibility these plans offer make them a cornerstone for education savings.
3. Save for the Unexpected
In the past 15 years, I can recall a broken water heater, my daughter’s locked-up engine, my dad’s declining health and eventual passing, and a hailstorm that caused damage well in excess of our $2,000 homeowners insurance deductible.
All these events required significant cash outlays. Yes, there are alternatives if you don’t have the cash to respond to these types of situations, but with interest rates like we have today, they are expensive alternatives.
Even if it’s only $50 per paycheck set aside in a savings account, start preparing for the unexpected. You may not be able to pinpoint what it will be, but it will be. Save today.
4. Save for Retirement
Let’s face it: If you work at it just a little, you can surely find a reason to put off starting to sock away money for a time when you reimagine work.
But what if you had felt the urge to save back in 2014 and set aside just $100 per month in an IRA or other investment vehicle? Believe it or not, today you’d have a retirement stash of more than $15,000 — a good result without even saving more each time you experienced a pay raise or promotion. That would have been a good start to creating your own road map or plan.
Do a little visualization and snatch your chance to put more money aside in the coming decade by building and executing your savings plan. You have plenty of reasons to start today.
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