When starting your personal finance journey, you’ll find that many experts recommend building an emergency fund first.
An emergency fund should have enough money to cover at least three months of living expenses. Living expenses could be anything from food and housing to utilities and loan payments. A financial safety net can help you feel financially secure.
If you’ve finally saved three months of living expenses, congratulations! Pat yourself on the back, and breathe a sigh of relief. Creating an emergency fund takes hard work and discipline; keep the momentum by saving for a new goal. After all, you’ve already developed the habit of saving. Why stop now?
Our first tip is to automate, automate, automate! It’s easy to forget to transfer funds manually each month. Take your sticky notes off the fridge and delete your calendar reminders by setting up auto-transfer. Schedule transfers on payday, so you can pay yourself first without lifting a finger.
Our second tip is to use a tool you love. It can be challenging to stay on top of your saving goals and avoid dipping into your emergency fund when all your funds are lumped together. Separate your saving goals to increase and decrease automatic transfers for each as you see fit.
Use a tool like the Payactiv VisaⓇ Card* to reach your goals. The Payactiv Card is not a credit card. It’s a bank account alternative that allows you to set money aside for as many goals as you like. Get total visibility over each goal with SmartSave in the Payactiv app1.
So what should you start saving for after you have created your emergency fund? Here are some of our top goals you should consider.
A car provides convenience that is difficult to put a price tag on. The cost of a reliable vehicle, and the associated insurance, upkeep, and gas, can be steep. If you take public transportation, use rideshare services, or want to save for a new car, start saving now. If you’re unsure how much to save, the average household spent nearly $11,000 on transportation costs in 2021.
Interest rates are higher than usual, so you could save thousands by paying for a new car with money saved ahead of time.
Save for a $10,000 transportation cost in…
Buying a home can also be an excellent investment opportunity to increase your wealth. If you can safely set money aside each month, try saving for a down payment on a home.
Here are stats and numbers that could help you get started. A National Association of Realtors report found that the average home buyer puts a 13% down payment on a house. A 13% down payment on a $300,000 property is about $40,000.
Here’s how much you would need to save every month to save $40,000 in one year, three years, five years, and ten years.
Save for a $40,000 down payment in…
Engagement rings, venues, flowers, dresses, catering, and entertainment all add up quickly. In 2022, the average wedding cost $30,000. If you have young children, give them the gift of saving now.
How much would you need to save every month to have $30,000 in one year, five years, and fifteen years? Let’s break it down.
Save for a $30,000 wedding in…
Whether to pursue a college degree, increase job opportunities, or make a career switch, saving for higher education is a goal that will pay for itself. If you have young children, setting money aside in a tax-advantaged 529 Plan or Education Savings Account can help them get a head-start after high school. Your children and grandchildren can also use the funds to pay for college and trade school instead of taking out high-interest student loans.
The average cost of college for a student per year is over $35,000. Even if you or your children receive financial aid, additional educational costs like books, housing, food, and extracurriculars can quickly add up.
Start setting aside money for higher education to help take the pressure off an already stressful time.
If you want to earn more income, pay off debt, or quit your nine-to-five, start saving for your side business today. According to a recent LendingTree survey, the average side hustler earns $473 each month, which adds up to nearly $6,000 annually.
Your side business will likely have startup costs. Until your business makes enough money to support itself, you’ll need to save for products, shipping, equipment, and labor up-front. Factor in how much time you’ll need to make your business profitable when calculating how much to save.
Putting funds into a regular savings account may cause you to miss out on more significant financial gains through other investment opportunities, especially if your goals are long-term.
After saving three months of expenses in an emergency fund, consider investing in your retirement. With a 401K or Roth IRA, you can invest in stocks, bonds, or mutual funds, often providing a higher return than the typical savings account. Research accordingly and speak to an investment professional before investing.
Saving for an emergency fund is a huge milestone, and it is just the beginning. Whether you save for a new car, tuition, a child’s wedding, or an investment opportunity, your future self will be glad you started now.
Set up to $10,000 aside automatically with Payactiv. When you apply2 for the Payactiv Card, you can create goals in the Payactiv app for free. The Payactiv Card is not a credit card, so there are no fees or interest.
Pay yourself first by transferring funds on payday with direct deposit. It’s optional, but it’s the easiest way to automate your saving goals and reach them faster. Plus, you can get paid up to two days early3.
Start saving now by applying for the Payactiv Card today!
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2 Subject to ID verification.
3 Many (but not all) employers, government benefits providers, and other originators send direct deposits early with an effective date of 1-2 days later. Beginning with your second direct deposit of at least $5 from the same source, Central Bank of Kansas City (CBKC) will post the funds to your Payactiv Visa Card when we receive it, rather than on the effective date. This may result in your having access to the funds sooner. The date CBKC receives your direct deposit and the effective date are controlled by the originator.
* The Payactiv Visa Prepaid Card is issued by Central Bank of Kansas City, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Certain fees, terms, and conditions are associated with the approval, maintenance, and use of the Card. You should consult your Cardholder Agreement and the Fee Schedule at payactiv.com/card411. If you have questions regarding the Card or such fees, terms, and conditions, you can contact us toll free at 1 (877) 747-5862, 24 hours a day, 7 days a week.
Central Bank of Kansas City does not administer nor is liable for the Payactiv App.
All content provided on Payactiv.com/financial-learning/ is for informational purposes only. Payactiv makes no representations as to the accuracy or completeness of any information on this site or found by following any link from this site. Payactiv will not be liable for any errors or omissions in this information nor for the availability of this information. Payactiv will not be liable for any losses, injuries, or damages from the display or use of this information.
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* The Payactiv Visa Prepaid Card is issued by Central Bank of Kansas City, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Certain fees, terms, and conditions are associated with the approval, maintenance, and use of the Card. You should consult your Cardholder Agreement and the Fee Schedule at payactiv.com/card411. If you have questions regarding the Card or such fees, terms, and conditions, you can contact us toll-free at 877-747-5862, 24 hours a day, 7 days a week.
** Central Bank of Kansas City is the issuer of the Payactiv Visa Prepaid Card only and does not administer, endorse, nor is liable for the Payctiv App.
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