In our last post, we talked about how everyone needs to save money. You might need to consult a Troy, Ohio bankruptcy attorney first, but here is some more information about creating savings funds.
Organizing Your Savings
Creating a savings involves more than just sticking spare cash in a box under the bed or a jar above the refrigerator. You will likely need more than one fund for short-term and long-term goals and emergencies.
Short-term: This includes vacations, holidays, routine repairs to the home or other specific ideas that you are interested in saving up for. When banking online, it is simple to create different savings accounts for these goals where you can set up monthly contributions.
Long-term: These goals might not be as definable, but this money is intended to help you live comfortably when you are older. When building a long-term savings, you may want to save 5 percent or more every year with the ultimate goal of saving 15 percent a year. This money can be put in IRAs or company retirement accounts.
Emergencies
The emergency fund helps you prepare somewhat for unexpected events that can bring large expenses like vehicle repairs, a trip to the emergency room, sudden home improvement needs and more. There is no way to predict how much money you might need for unforeseen circumstances, but you can find a figure by looking at your monthly expenses and income. Aim for an emergency fund that covers three months worth of your monthly expenses if you have a stable income that you can count on. If your income varies or comes more sporadically, have more set aside like six months of your expenses.
We will work with you to find options that suit you when you are struggling with debt, so contact us today.