Great DIY Savings Plans to Invest in Your Future
February 13, 2019
Due to a combination of low wages, general poverty, reckless spending habits, and inadequate savings, over 40% of Americans don’t have enough even to cover a $400 medical expense. While this may not be so much of an issue during the daily grind of everyday life, it can quickly turn into a catastrophe if and when an emergency happens.
In prior decades, people could rely on their pensions to cover for their retirement, today’s workforce is, more or less, on its own. Something as simple as an auto or home repair or an unexpected medical bill will be enough to spin things entirely out of control. It is for this reason why savings plans need to be a priority for anyone, regardless of age, health, or income.
A general rule that we are all accustomed to when it comes to savings is to put aside 10 percent of our income. But this rule is no longer up-to-date with the times, and it’s far wiser to put aside a minimum of 15% or preferably more. That said, here are four savings plans to consider.
The Get-Out-Of-Debt Plan
When you have crippling, high-interest consumer debt hanging over your head, it’s next to impossible to put money aside for retirement or even a rainy day.
Start by tackling high-interest credit card and personal debt first, then move on to car payments, student loans, etc. Without those monthly debt payments, you’ll be in a far better position to save money down the line.
The Home Down Payment Plan
Saving up over 20 percent for a house down payment will help you reduce the amount that you need to borrow. It will result in lower monthly payments and less interest. Likewise, this will help you avoid private mortgage insurance (PMI). It can cost up to one percent of your home’s value, which for a $200,000 home can reach $2,000 per year. With a 20 percent down payment, you can avoid this PMI altogether.
The Emergency Fund
Saving up for a rainy day should be on everyone’s mind. Most financial advisors would suggest that you should put aside a minimum of 3 to 6 months’ worth of wages in case of emergencies. To get started, you will first have to figure out just how much you spend every month.
Let’s say that your average monthly expenses hover somewhere around $3,000. Set a timeframe of about two years and work your way up to $9,000, or three months of expenses. That should bring you to about $375 per month. Whatever your goal is, it’s always better to start on this fund sooner rather than later. Make it a habit to keep saving at least until you’ve reached your goal.
The New Car Fund
Though not as important as the other savings plans presented here, the new car fund is a good way of preparing for the inevitable. All cars, regardless of make or maintenance, will inevitably break down. It’s always a good idea to anticipate this problem and be prepared for when the time comes.
If you depend on your vehicle for your livelihood, having readily available cash on hand to deal with this issue is even more critical. It’s also wise to invest in cars that hold most of their value over the years so that you can resell them at a reasonable price if need be.
These DIY savings plans are a great way to safeguard yourself and your family against any unforeseen emergencies and to get initiated in fiscal responsibility. If you find yourself strapped for cash, you can always count on Illinois Lending Corp to help you out. With no hidden fees or pre-payment penalties, Illinois Lending Corp is the way to go. Give us a call at 1.877.LOAN.195 or apply online today!