Savings is the key to success! I am not just talking about saving for retirement either! When I was much younger, I remember saving for the things I wanted because my parents gave me everything I needed. Most kids save for their first car, college, first house, getting married, vacations, major purchases and retirement. Everyone should have savings for emergencies and other unexpected expenses. Do you have a savings target?
Why have a savings target? You need a goal in order to reach or achieve the goal. If you are going to buy a car, you need a target. Saving for a down payment for a home means you need to know how much home you can afford. A typical down payment is 20% of the purchase price. Saving for a down payment takes time and effort. You need to figure out how much home you can afford years before you have the money saved for the down payment. This is true of buying a car and other major purchases. Saving for college or graduate school may take some years too.
If I wanted or needed $60,000 for a down payment, I would put together a plan of what I needed to deposit or invest monthly to achieve that goal. This is true for retirement, college, buying a car or any other major purchase. What do you do? How can you reach your goal without a target? Everyone should have a savings target!
Photo by: Vectorportal