Want to create a more solid financial foundation, not just for the coming year but for coming decades? Commit to small savings goals in these five budget must-haves.
Nearly one-third of Americans have nothing saved that they could use as a backup, even for small expenses.1
Aim to eventually have an emergency fund that equals several months of savings (even six months if you can get there).
Instead of focusing on the total you need, try to put aside one month’s salary over the next 12 months.
Only 18 percent of Americans could live off savings for six months.1
The average repair bill is just about $600, but one-third couldn’t pay it without also going into debt.2
Start with protecting your investment: Follow the recommended maintenance schedule to keep your car in shape.
Break that average repair bill into a monthly savings plan — just $50 a month will help you reach $600 in one year.
As your car ages, put more away in a repair fund to prepare for big-ticket fixes.
Nearly every homeowner has to fix or improve something in their home every year, at an average yearly cost of nearly $5,000.3
As with a car, have home systems checked twice a year for small fixes that can help prolong lifespan.
Open a separate savings account designated just for your home and add to it, monthly, as your budget allows.
On average, hiring a plumber for repair or improvements costs $310.4
Public tuition and fees average about $10,000 a year,5 but most families have saved a total of just over $18,000 for higher education.3
Hardly any families can save for the whole cost of higher ed. Set a target goal — perhaps the public tuition cost for four years.
Break that total four-year amount, into a monthly goal starting from today until your child would ideally enroll.
The average tuition and fee cost for private school is nearly $35,000 per year.5
Fifteen percent of Americans have nothing in retirement savings and more than a fifth have less than $5,000 saved for retirement.6
Save as early as you can and as regularly as you can, even if you have to adjust the total to accommodate other needs such as daycare.
Begin by contributing to work plans to get the full employer match. Contribute a percentage of tax refunds or bonuses to an IRA.
The median retirement savings for families aged 56 to 61 is just $17,000.7
Start your savings resolutions at statefarm.com/simple-insights where you’ll find budget and savings calculators as well as articles to help you improve your financial foundation.
6 Northwestern Mutual’s 2019 Planning & Progress Study
7 Economic Policy Institute