Next Steps after Reaching Your Savings Goal

One of the earliest pieces of financial advice we receive is to start saving early. Set savings goals and work hard to achieve them. Although it is wise to build your savings account, we often do not give much thought to the next steps after reaching your savings goal. But this begs the question, when can you say you have reached your savings goal? And shouldn’t you set another savings goal once you reach it?

Only you can answer these questions, so it is important to take them into consideration when planning for the future. Here are a few suggestions to evaluate your savings plan and decide what to do once you achieve your goal.

Next Steps after Reaching Your Savings Goal

 

The 50/30/20 Rule for Reaching Your Savings Goal

The first step is to create a plan to reach your savings goal. The 50/30/20 rule is a basic equation for people who do not like or struggle with detailed budgeting. Instead of tracking several categories, this strategy breaks your spending into three main categories: needs, wants, and savings. The actual amounts will vary based on your take-home income.

This simple approach cuts down the time you spend calculating your monthly budget. However, you still need to dedicate some time to sit down and work out the figures. First, you must determine your total monthly income after taxes. From the final amount, allot 50% for your needs. Then 30% can be used for things you want. Then, about 20% should be put towards your savings goal.


For example, let’s say your monthly take-home income is approximately $3,000. That means $1,500 would pay for your daily necessities. Be certain you are only including things you need to survive. This includes expenses for basic necessities like housing, food, utilities, transportation, health care costs, and minimum debt payments. If 30% has been dedicated for your wants, you should have about $900 available to spend. Finally, about $600 would go towards your savings.

There has been some dispute for those who live in places with a high cost of living. If food and housing are more expensive where you live, more of your monthly budget will go to your daily needs. Another point of contention is with the percentages for higher income earners.  Some argue 30% is way too much to spend on your wants. While the 50/30/20 rule is an excellent guideline, you may decide to tailor it to your finances to build your savings account or take the next steps after reaching your savings goal.

5 Steps After Reaching Your Savings Goal

 

1. Evaluate you Budget and Savings Goal

 

Keeping tabs on your finances and living under stricter spending limits helps you achieve your savings goals faster. After you create a monthly budget, you can also learn to spot negative patterns. Try to find ways to cut unnecessary spending and redirect money to pad your savings account. Those micro-transactions can really add up quickly and work against you.

If you have extra money at the end of the month, double-check your statements to make sure there were no missed payments. However, if you still have money to spend, it is time to create a plan for your next steps after reaching your savings goal.

 

2. Pay Down Your Debts

 

Becoming debt free is a common financial goal. If you have a little left over, it could be an opportunity to pay down more on the principle amount owed. There are two approaches towards tackling debt repayment; the Debt Snowball vs. Avalanche methods. Both have been highly successful in helping people become debt free, but perhaps one will be more beneficial to you. The Debt Snowball method pays off the smallest debts first to reduce the number of lenders you owe. However, the Debt Avalanche method takes on the debts with highest interest first. Whichever approach you choose, paying down debt is an important step after reaching your savings goal.

 

3. Use Your Savings to Invest

 

Another wise way to secure your savings is through investments. You can use that extra amount to buy shares in mutual funds or open supplemental retirement accounts. If you want to contribute to your family’s future financial security, you could invest in stocks or bonds for your children. With compounding interest and time, small investments can accrue into significant sums of money. When they become of legal age, they could have a large lump sum to help give them a head start in life.

Here are five of the best investing apps you can use to start saving to invest. We included the fees and minimum and what it is best for so that you have a glimpse of what these apps are.

AppFees and MinimumBest for:
RobinhoodFreeInvesting for Everyone
Acorns$1 per month
Spare change investing
Ellevest$1-$9 per month
no account minimum
Investing for the future.
The Motley Fool$99 for the first year.Stock advising

4. Look for New Opportunities

 

For some people, the next step after reaching your savings goal is to look for new opportunities. Perhaps you decide to splurge a little on yourself or use your savings for something that you enjoy. You could take up a new hobby or try an activity that was previously out of the budget. It could be the perfect time to use the funds to finally take that dream vacation or buy a vacation home at your favorite spot. You could also fund that business venture you have always talked about pursuing. Once you have taken care of all your other financial obligations, it is a good time to look for new opportunities.

5. Secure Your Financial Future

 

For others, the most practical next step after reaching your savings goal is to secure your future. First, revisit insurance policies to ensure that you are appropriately covered and your loved ones are taken care of. While you likely already regularly contribute to your retirement accounts, you can increase the amount or find new vehicles to supplement your retirement funds as well. Investing in your future is always sound advice.

Furthermore, you may want to secure your family’s financial future. If you are just starting a family or looking for more space, you could use your savings as a down payment on a home. You may also consider opening an account in your children’s name or starting a college fund for them. These are huge expenses later in life, so every bit helps lessen the financial burden.

 

What to Do After Reaching Your Savings Goal

Although it may still be a pipe dream, you should consider what you would like to do after you reach your savings goal. You cannot be in a constant state of striving for the next goal. It is important to recognize the milestones as they come. This doesn’t need to be anything extravagant, but take time to celebrate your successes along the way.

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5 Reasons Why You Should Consider a Seasonal Job This Year

A seasonal job can be more appealing than you think. When provided an opportunity to generate some extra income, you should take it. There is even more incentive if it means reaching your financial goals faster. Finding those opportunities can be few and far between, but a seasonal job is a great option to earn some extra money during the summer or around the holidays.

Seasonal jobs are a great way to make money while incorporating your hobby.

Seasonal jobs are a great way to make money especially by doing things you already enjoy.

5 Reasons to Consider a Seasonal Job

1. A Variety of Seasonal Opportunities 

Other than the obvious reason, seasonal jobs exist in a variety of interesting fields. If you have a specific hobby, you could look into seasonal positions using your skills. For instance, if you are an avid skier or snowboarder, why not work a winter at a ski resort? Not only will you get some extra time on the slopes for a (possibly) discounted rate, but you also get to make money working somewhere that actually interests you.

However, you don’t need to travel to find a season job. The same idea applies even in your local community. If you enjoy shopping, ask about job opportunities the next time you visit your favorite stores. In addition to working in a place you like, you can also get employee discounts.

2. Greater Potential to Travel 

Are you looking for an excuse to travel more? If you don’t have a full-time job or a remote position, you may want to consider a seasonal job. Vacation resorts and tourist destinations often have many temporary employment options. During the high season and holidays, many places are glad for the additional help. You can use this type of job as an excuse to see a new place while also keeping your bank account stable.

3. Flexible Schedules with Seasonal Jobs

Often, seasonal positions entail working outside normal hours, particularly when you are working at a store. Because of this, you have the perfect chance to earn side income in addition to your full-time wages. This allows you to make more money and worry less about fitting an additional job in your schedule. Putting the extra money toward investment opportunities or savings accounts would be an excellent use of funds.

4. Obtain New Connections

The more people you meet, the more job prospects you create for yourself. As you expand your network and gain a good reputation around the workplace, you leave your footprint. This is important for networking and obtaining references for future employment. Just remember to make that first impression long-lasting and favorable.

Some seasonal positions also intend to keep the best of the best. If you can see yourself working your way up the company ladder, it’s a great way to get your foot in the door. In addition, if you are currently looking for a full-time job, this is just another way to help you along your career path.

5. Learn New Job Skills 

There is always something to gain from every job, whether it is learning a new skill or grasping a concept of smart business. Seasonal jobs improve your resume in multiple ways. First, they increase or enhance your expertise in a new industry. It can even be something as simple as better customer service skills. Second, it improves your interviewing skills and builds your overall resume.

Not only do you learn new things, but you are also absorbing this information in a short amount of time. This is also an excellent point that can be included when applying for your next position.

How to Find a Seasonal Job

If you are unsure where to begin searching for a seasonal job, the easiest and most convenient answer is online. There are literally dozen of job sites out there that cater specifically to seasonal jobs and temporary position. A quick search will bring you to local postings in your area.

Another great way to land a seasonal position is to start asking around. Friends and family are great resources, so utilize them! Some of the best seasonal jobs may not even be advertised. Furthermore, you can also ask about available positions in stores and places of business you visit often. If you are hesitant to be in public and prefer to work from home, there are also sites that can help you find ways to work remotely. You never know what opportunities are out there until you start looking.

Overall, seasonal jobs have the capacity to be quite the rewarding experience. They offer several benefits from the people you meet to the different opportunities they provide. Moreover, you can test the waters in new career fields. It allows you to see where you want to be and consider what you want to do for the rest of your life.

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What to Do When You Have Too Many Bills and Not Enough Income

If you dread opening the mailbox because of monthly bills, it may be time to evaluate your financial situation. Having too many bills and not enough income is a major red flag. It likely means you are exhausting your income which leads to debt. You are jeopardizing yourself even further when you use credit cards to make it from month to month. If this sounds like you, here are a few tips to help put you in the driver’s seat and take control of your personal finances.

What Do You Do When You Have Too Many Bills and Not Enough Income?

Take Control if You Have Too Many Bills and Not Enough Income

Balance Your Books

The first thing you must do it to balance your books to see why you have too many bills and not enough income. Inventory all your bills and outgoing payments within a month. Write it out instead of pulling it from memory to be certain you don’t miss anything as well.

The easiest place to begin is with your monthly statements. It can be overwhelming if you have a lot of bills coming in each month. Break them into smaller categories like utilities, loan, and credit card payments and deal with them one by one. If you tend to forget payments, set up electronic ones online. Then you will never have to worry about late fees or other penalties again.

Review the Monthly Budget

As you are looking over those monthly bills, pay attention to the larger expenses on your credit card statements. This is a great way to review your family’s spending habits and see where all your extra cash is going every month. Those micro-transactions for fast food, coffee, and other daily expenses add up quickly. Enforcing a little self-control and sticking to the budget saves more money than you might think.

Another way to reduce your monthly spending is by getting rid of unnecessary expenses. Eliminate subscriptions, memberships, or services that you are not fully utilizing. You can also look for bundled or packaged services for insurance and telecommunications. Be sure to shop around and compare prices to get the best prices possible.

Eliminate Your Debts

The next step to regain control of your finances to tackle your debts. Contact any lenders or collection agencies where you owe money. Discuss settlement and repayment plans to get you out of the red. Often times, you can negotiate for manageable terms since they are willing to work with you.

If you have considerable credit card debts, you may want to consolidate your debt into a single monthly payment. You can do this with a refinancing loan or go through a debt relief agency to negotiate on your behalf. You will usually get lower interest rates as well.

Increase Your Income

Of course, the easiest way to solve this is to get more income. First, look for opportunities to earn more at your current job. You could pick up extra hours, ask for a raise, or go after a promotion. It is much simpler to increase earnings at a job you already have than to find a new one.

However, if you still have too many bills and not enough income, you may consider a second job. Another option is to search for ways to earn passive income. This could be the perfect time to turn your hobby or services into a small business venture.

No Excuses

Finally, you cannot make excuses for your poor decisions. Avoiding your financial issues won’t solve anything. Furthermore, small issues will easily grow into more serious problems the longer you look away. You must be brutally honest with yourself to get spending habits and debts under control. Rationalizing your behavior is not helpful or beneficial for your financial health.

It takes sacrifice and discipline to reach your financial goals, no one can do the work for you. Most importantly keep a positive outlook and remind yourself that you are capable. You should also find ways to motivate yourself to continue moving towards your ultimate goals. It can be a long and arduous process, but there are ways out of financial hardships towards a more secure future.

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