Get in the habit of saving more by putting money aside for these big events.
AN EMERGENCY SAVINGS FUND
This is more than just “saving for a rainy day.” This fund will cover you if you’re laid off from your job or face an unexpected health or financial emergency. Try to have at least three months saved.
• Start small. If you don’t have much to put in, put aside whatever you can, no matter how small. It’ll add up over time.
• Treat it like a bill. Make your emergency fund part of your monthly bills. When all of your bills are paid, move any remaining funds into your savings account.
• Save your savings. When you pay off or save money on a bill, put the amount you would normally set aside for that expense into your emergency fund.
A DOWN PAYMENT ON A HOME
The larger your down payment, the more equity you’ll have in your home. Saving takes time, but be patient and focused on the end goal of homeownership.
• Open a savings account dedicated to your down payment fund.
• Automatically transfer money each month.
• Save your tax refunds, inheritances and any other windfalls.
• Look for opportunities to make money, whether it’s doing overtime at work or taking a second job.
YOUR CHILDREN’S EDUCATION
If you want to pay for your children’s education, it’s best to start early.
• Contribute to a tax-advantaged college funding plan, such as a 529 college savings plan or other qualified
tuition programs. Invest after-tax money into the plan and withdraw the funds tax-free to use toward qualified education expenses, college tuition and books.
• Open a custodial account, such as a Coverdell Education Savings Account, to cover any educational expenses, including those for K-12 costs and private school tuition. Be aware that income and contribution limits may apply.
• Use Roth IRA as a college savings tool. Contribute after-tax money and investment gains that can be withdrawn tax-free later. You can withdraw funds tax- and penalty-free to pay for qualifying educational expenses after five years; however, some income and contribution limits may apply.
• Look into Prepaid College Tuition Plans, which allow you to lock into college tuition now at current prices with a participating school.
• Encourage your child to save. Whether it’s birthday and holiday money or their own earnings, advise them to put as much as possible away for college.
RETIREMENT
Maintain your lifestyle in your golden years with these tips.
• Maximize your contributions to your IRA and 401(k). The older you are, the more you’re allowed to contribute to “catch up.”
• Put 10-15% of your annual income into a retirement account, if possible.
• Invest wisely; many retirees live on the interest accrued on their investments.
For over 30 years the Prime Property Team and Ron Carpenito of Keller Williams Realty Andover have been helping home buyers and sellers in Andover, North Andover, Haverhill, and the Merrimack Valley with their real estate goals. If you’re thinking of buying or selling a home anywhere in Massachusetts or know someone who is, contact Ron today at (978)494-0346.
Home Selling Resources
| Complete Guide to Home Selling | Get a Free Consultation on Selling Your Home |
| 10 Tips to Selling Your Home | How to Prepare Your Home for Sale |
| Find Out What Your Home is Worth |
Home Buying Resources
| Search Homes For Sale Now | View Open House List |
| Home Buying Process – A Complete Guide | 7 Tips to Home Buyer Success |
| Free Home Buyer Consultation | Why You Need A Buyers Agent |
