Y’all, you not only need to save in 2022. We should have been saving in 2021, 2020, so on and so forth…
There are many reasons people do not save. Not enough room between paycheck and bills to save, never thought about saving, saving is a weird concept that only old people do… Whatever the case is, there is nothing wrong with saving. In fact, you need to save.
Why 2022 specifically? Because we are still in a pandemic, the employment market is volatile, the stock market (side eye, retirement plans) is volatile. It is still crazy out here in these financial streets.
I have talked about this before, but there are many reasons and ways to save. Let’s get to it…
Reasons:
Emergency– Just like it sounds like, when something unexpected comes up it is always nice to have money to keep from going into debt or into more into debt.
- I am thinking car issues, medical bills, blown appliance. I am not thinking Bath and Body Works sales, brunch dates, or random shopping.
How much money should be in your Emergency Savings? This is not a one size fit all answer. I personally do 6-9 months of expenses. Some will recommend 3-6, 10-12, or even 2 years plus. You know your situation. What is important is to start saving.
Retirement- Do you plan on working for the rest of your life? if not, you may want to save something toward the moment you decide to walk away from traditional work.
There are many tools to save for retirement. Your employer may offer a 401k with or without a match. You can open an IRA with a brokerage account. The 401k and IRA can be Traditional or Roth. You can have a normal brokerage account that you buy and hold assets in.
- Traditional- Before Taxes
- Roth- After Taxes
*** I will do another post that goes into detail about Retirement accounts***
Life and Upcoming Events
Do you plan on taking a vacation this summer? Are you saving for it? What about new, to you, car? Are you saving towards that? There are so many events that we can plan for with a little intentionality. Below are a few:
- College Savings
- House Down Payment
- Birthdays and Holidays
- Large purchases
These are just a few reasons why you should save. Whatever reason you have, just start. Easier said than done right? If you need help, check out my coaching and planning services.