Sweet Frugal Life

Being Frugal Doesn't Make Life Any Less Sweet

  • Start Here
  • Free Downloads
  • Frugal
    • Frugal Living
    • Budgeting
    • Travel
    • Gift Ideas
    • Good Deals
  • Parenting
    • Money Education
    • Holidays
    • Crafts
  • Recipes
    • Breads
    • Dinner
    • Cleaners
  • Recipe Book
  • Contact
  • Privacy Policy

3 Steps to a Long Term Savings Goal

October 2, 2019 By: Sweet Frugal Lifecomment

Did you know that half of all Americans do not have any money saved for retirement?  I read this statistic the other day and it made me so sad.  Long term savings is so important, but also one of those things that is easy to put off until “next year.”  The future often looks so far away, it’s hard to remember to plan for it immediately.

The truth is though, that the earlier you you begin to save for the long term, the more money you will have and the less stress you will feel.  If this is something you haven’t been making a priority yet, I encourage you to make it a priority now.

Long Term Savings are for life events within the next 5 or more years.

A few reasons to save for long term is:

-Retirement

-College Savings

-Buying a house

Here are my 3 easy to implement steps to saving for your long term goals!

Three Steps to a Long Term Savings

1.  Make a Plan

Write down what you want to save for.  Do you want to retire at 55?  Pay cash for your kids to attend college?  Travel the world?  Write it down and write down your best guess of how much money you will need saved.  This might take some research, but the time and effort is well worth it in the long run!

I like to use the free online retirement calculators to help give me an idea of how much money I will most likely need.  I recalculate these numbers every few years to make sure we are on the right track.

To decide how much money you need to save for college, simply average the cost of the three most likely schools your children will attend.  This gives you a good rough estimate to shoot for.

  • Related:  How to Budget With Sinking Funds: Your Complete Guide to the Most Asked Questions

2.  Invest and Save

Now that your plan is made it’s time to start saving.  This is the fun part!

For shorter term savings you would want to save into a high interest savings account or a CD.  Because we are talking about long term savings I recommend saving through investing.

For Retirement:

Aim to save 10-15% of your paycheck into a retirement account.  The best place to start saving for retirement is in a 401k or ira.

If your company matches your contribution into a 401k (this is usually a fixed percentage) take advantage of that match!  For example:  If your company offers a 3% match, contribute 3% into that account.  This gives you free money!  Take advantage of it from the very moment you begin working.

For College:

A good investing options for college savings is a 529 plan.  There are a few different plans you can choose from.  We like to be more aggressive when the kids are young and then change to more conservative as they grow.

You might find it beneficial to meet with a financial adviser to set up your investment accounts.  Our financial adviser has been so helpful in answering our questions and pointing us in the right direction.

I also highly recommend setting up automatic contributions into these accounts so that no matter what the money is being saved and invested.

3.  Use Time to Your Advantage

Time is your very best friend when it comes to long term savings.  The sooner you begin to save, the more your money will grow.  Through smart investments your money will grow not only on what you save, but also on the interest you are receiving.

It’s important to be patient when investing.  The stock market will rise and fall over time.  The best practice is to leave your money in the market through the ups and downs rather than pulling it in and out.  Use time to your advantage!

 

 

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recipe Rating




Hello! I’m Melanie!

Follow me on social!

Want more frugal tips?

Terms and Conditions

Disclaimer

Copyright © 2023 · Modern Blogger Pro on Genesis Framework · WordPress · Log in

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.AcceptReject Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT