Fox Money Blueprint: How to Maximize Long-Term Savings

Building Your Emergency Fund and Accomplishing Your Savings Goals

In this final installment of the Fox Money Blueprint, we’ll continue to build upon the foundation we have started. Previously in this blog series , we’ve discussed how to set goals, establish a budget and much more. Here, we’ll take a closer look at how to build long-term savings. 

As you get the hang of budgeting, fine-tuning your budget, building and using an emergency fund and saving, you will start to make tangible progress towards your financial goals. You may even accomplish some of your goals sooner than you thought! 

Here are some other areas where you can continue to build momentum in as you move forward in your financial journey, learning new skills and building confidence. 

Fortify Your Emergency Fund

After paying off high interest debt, building an emergency savings account is a great way to help weather any financial storm. A good rule of thumb is to have 3-6 months of expenses put away into your emergency savings account. The good news is that you have already created a habit of saving so this should hopefully come easy.

•    Using your spending/savings plan, determine the amount to cover your expenses for one month.
•    Systematically save until you have 3-6 times that amount in your liquid savings account.

Max Out Saving for Retirement

Hopefully, by now you have started to see how compounding interest has been impacting your savings. Now it’s time to really grow that nest egg for the future. 

•    Work up to investing 15% of your gross income.
•    See a financial consultant for advice on where to put your hard-earned money.  Fox Communities Credit Union offers this as a free service.

Save for Other Long-Term Goals

Don’t forget about saving for other long-term goals.  Depending on where you are on your life’s journey, these goals will change.  A few examples are as follows:

Purchase a Car

Wouldn’t it be great if you could save a substantial amount to use as a down payment on your first or next car? Cars are a depreciating asset.  This means that they lose value over time.  Having a large down payment or paying for the car in cash assures that you will never be in a negative equity position. 

Save for a Down Payment on a Home

Saving enough to put 20% down on your next home will offer some amazing advantages.
•    You will avoid additional fees associated with mortgage insurance.
•    It will help you qualify for the best rates and terms.
•    It will reduce your monthly payment.

Build a College Fund for Your Child 

•    Saving for your children’s higher education expenses might be low on the priority list for many.  However, it can present significant savings for you and your child in the future.
•    The less that is taken out in student loans, the easier it is for your child to start saving themselves.  Having a small amount of student loan debt allows them to start saving and investing more at an earlier age.  
•    We all want our kids to be better off than we were.  Helping them offset tuition expenses is a great way to help them get started on their life’s journey as an adult.