You know you should save for emergencies and you know you should save for retirement, but there are also a handful of other things you may not know you should be saving for.
Do you every wonder where things like 90-days same as cash or 0% for 18-months came from? Well, I can’t exactly prove it but I am pretty sure it is because people are not saving for the five things we’ll discuss today. Let’s jump right in. I want to talk about the first three things, which are common needs but not commonly saved for.
This could be the dishwasher, refrigerator, washer or dryer. I grew up in a generation that bought brands like Kenmore, which lasted twenty to twenty-five years. Because appliances can last so long, it can be very easy to rely on these things until one day, boom, they break down and now you are in trouble. You haven’t been saving up for it, it wasn’t fixable, and so you run out to the big box store to replace it. Thus, you find yourself on a credit card to the big box store for 0% for 18 months. What happens if you don’t pay it off in 18 months? Well, you’ll have to pay all the back interest as well. It's a trap just waiting to happen.
If you are moving and you need to get different furniture for your new place, it is very easy to go to the store, pick up what you need and throw it on a credit card because you have nothing saved for that furniture you now need. The same is true for when that piece of furniture breaks or wears out, and at most furniture shops they go beyond 18 months up to 5 years and really suck you into a false sense of security. Don't fall for it!
Whether you are getting a Macbook or a Chromebook, you need to be prepared or else you are going to be making payments forever. You want to break free of that payment cycle and make sure you are saving. Don’t forget about them; be prepared and save a little at a time. Also, don't forget to factor in tax and any accessories needed like a case, carrying bag, etc. Lastly, here are two additional BIG items you should save for…
Your next car. There will come a day when that is what you’ll need, whether next year or several years down the line. You need to save up for your next vehicle or else you will be stuck in payments for the rest of your life. This is where much of that “poverty” mindset stems from. “I will always have a car payment." or "I will always be in debt.” NO, it does not have to be that way! You can break free of that payment cycle. I bought myself a car in 2016 by simply saving a little at a time. It is possible and I have tips that can help you do the same plus give you all tips and checklists you need to buy a quality used car for cash without ending up with a lemon. Just reach out to me and I'll get them to you. Going beyond even this opportunity you need to know that if you save up in a good growth stock mutual fund, for not even as long as most are stuck in a traditional car loan, you can build that investment up to where over time it will buy you a quality used car every five years. So, basically, you get free cars for life! More about this specifically at the end of February. Stay tuned!
Most people go into a house from another and roll over the equity from the previous to cover all or part of their down payment. But, if you are stepping up the size of your home or it is your first home, you need to save up the difference to come up with that down payment. Setting aside money over time, and meeting a few other criteria, can put you in a position of being a true homeowner. In fact, check out my previous video, “A Simple 4 Part Recipe for Secure Home Ownership", to avoid that home owning you! If you want to make these steps a reality, learn to save for these things, figure out how much you need to save, and put the steps into practice, then reach out to me for a free consultation. I also encourage you to download my free e-book, which will provide some great tools and help you keep your wallet heavy and your heart light.
Question: What other large expenses or events did you realize you need to be saving for? Share in the comments below!