Once you’ve built a robust emergency savings, usually recommended to be enough money to cover six months to a years’ worth of expenses, you should still try and make saving a priority for other items. Here are some other ideas to start your savings.
Take a look at some of the short-term goals you have for your finances. This is anything that could be six months to two years away. If you don’t have any short-term goals, come up with some. Maybe you want to go on vacation or have an upcoming wedding. These are great ways to use that extra money you are no longer putting towards emergency savings.
Maybe you’ve been thinking or starting a business or wanting to invest in real estate. These ideas may benefit from longer savings terms and putting your extra money here may help you reach these goals a little bit quicker.
HOME DOWN PAYMENT
Putting aside money to purchase a home is a great investment into your future. Having an emergency savings in addition to a down payment puts you in a great position when the right time comes to buy a home.
Diverting this extra money into your retirement fund is great way to invest in yourself and your future. The more you are saving for a longer period of time, the more your retirement savings will grow. If your employer offers a match incentive, make sure you are taking advantage of that.