Are you at the stage of your financial journey where you’re ready to take your savings goals up a notch? Maybe you’re debt-free (or on track to be debt-free) and you have more income to allocate to other, bigger goals. Maybe you’re making more money than you ever have before and now you want to reach a new level.
Whatever the case may be, if you’re looking to take your savings goals up to the next level, I got you covered! I’m sharing 4 next-level savings goals to set so you can accomplish more than you thought possible. Each of these goals are usually recommended in smaller increments, so get ready to take things up a notch!
4 Next-Level Savings Goals to Set
#1 Max Out Your Retirement Contribution
One of the best things your present self can do for your future self is save for retirement. Whether it’s through your company’s 401k plan, an IRA or a SEP IRA (for self-employed individuals), contributing to some form of retirement will have lasting benefits.
Some people get a late start with saving for retirement, but that doesn’t mean you can’t make up for lost time. If you’re looking for a next-level savings goal to set, start with maxing out your retirement contributions. A 401k plan has much higher contribution limits than an IRA, so focus your efforts there first. A SEP IRA has much higher contribution limits than an IRA, so if you’re self-employed, contribute there. The goal is to max out, and increase your max out as the limits increase year over year.
#2 Save 12 Months’ Worth of Expenses
We all know that your emergency fund should cover 3-6 months’ worth of expenses, but if you want to take that savings goal to the next level, make it 12 months’ worth of expenses! Make a goal to double or triple your current emergency fund amount. Think about how great it would feel to have one years’ worth of expenses put away? You can give yourself so much security and freedom with that amount in savings.
#3 Invest 10% of Your Income
Assuming you’re debt free, happy with your retirement progress, and have a solid emergency fund, a next-level savings goal to set would be to invest 10% of your income. I’m not talking retirement. I’m talking 10% of your income going to a general investment account that you leverage to invest in the stock market.
Investing is one of the best ways to build wealth in the long term. While contributing to a retirement plan is a form of investing, general investments can help compound your wealth-building efforts. Listen to CGS Podcast Episode #107 – Adding Investing to Your Money Goals for some great insight into getting started with investing.
#4 Save a 20% House Down Payment
The final next-level savings goal I’m sharing is a bit subjective. Save 20% for a house down payment. This goal only works if you plan on owning a home or rental property in the future. Not everyone wants to, and that’s absolutely okay. However, if you don’t want to own a home or property one day, a next-level savings goal would be to have a 20% down payment saved for the purchase.
There are plenty of incentives and programs that don’t require you to have 20% down, but that’s not the point. The point is to have a next-level goal! Putting 20% down automatically removes the need for PMI (Private Mortgage Insurance), which can save you quite a bit. 20% down will also bring down your loan value and reduce your monthly mortgage payment. If you plan on owning property, make sure you set and work towards this goal!
Related: CGS Podcast Episode #80 – 8 Things Everyone Should Be Saving For
You may not be able to work towards all 4 of the next-level savings goals at once, but you can certainly knock each out, one at a time. I have some sort of iteration of each of these goals that I share in the article Breaking Down My Savings Accounts and Strategies. Definitely give it a read if you’re looking for more savings-strategy details! Are you at a point in your finances where you’re ready to take it up a notch? Do you already have some of these goals accomplished? Drop a comment to share!
-Raya
The CGS Team
