Long-term savings, including strategies like a Gold IRA Etc., require more time and commitment than short-term goals, and they can be trickier to plan for. But with a bit of discipline and a well-rounded approach, they can help you achieve your financial goals.
The first thing you need to do when planning for a long-term goal is figure out how much it will cost. You can do this by working backward from your goal. For example, if you want to retire by age 60 and you are 35 now, you can calculate how many years you have left and determine how much you need to save each month. Using an online calculator is also a good way to get a general idea of how much you will need to save over the course of your lifetime.
Once you know how much you need to save, you can set up a savings or investment account to automatically transfer funds into each month. You can do this in conjunction with your emergency fund to make sure you’re saving enough for both emergencies and the things you want in life.
If you aren’t sure how much to save, it may be a good idea to start small and increase your contribution as your income increases. That way, you’ll get in the habit of saving and won’t feel like you are cutting back on current expenses to do so. It’s also a good idea to set up an automatic deduction from your paycheck, which will help you keep on track with your savings goals.
When it comes to saving for long-term goals, a good rule of thumb is to aim for a minimum of 10% of your income. This is the amount recommended by The Financial Gym for retirement savings, but it can vary depending on your individual needs and goals.
In addition to the savings you set aside, you should also consider putting money into an investment account to maximize your earnings. This type of savings account typically comes with higher returns, but it’s important to understand the risk involved. If you’re unsure of what type of investments to choose, it may be helpful to speak with a financial representative for guidance.
Once you have a solid emergency savings fund and your debt payments are under control, it’s time to start thinking about your longer-term goals. Whether it’s buying a new car, renovating your home or taking that dream vacation, these milestones come with a price tag and will likely take more than just a few months to save for.
Once you’ve figured out how to pay for the “needs” in your budget, it’s time to look at the “wants.” This can include everything from tattoos to egg freezing, and while they might not be necessities, they are often high on the priority list. It’s still a good idea to save for these purchases, as they can bring you joy in the future and reduce stress in the present.