3 Savings Funds to Start Making Now

What are you saving for? A vacation? A wedding? A home renovation? While these are great savings funds to have sitting in your financial portfolio, you’ll want to add these three funds to the pile as soon as possible. 

1. An Emergency Fund

You need to have a collection of savings reserved for urgent, unplanned expenses that crop up in your life. Think about expenses like a last-minute dentist appointment to replace a filling that fell out in the middle of your lunch break or a trip to the vet after your dog got mysteriously sick. Your emergency fund can help you cover these important bills without having to disrupt your personal budget for the rest of the month. You’ll still be able to buy your groceries, manage your utility bills and pay for your insurance premiums as normal. 

Without an emergency fund, you might not have an easy way to pay off an urgent, unplanned expense right away. You could use the money sitting inside your checking account, but doing this could potentially upset your entire budget for the month. A better option might be to borrow funds to handle the emergency expense. For instance, you could try to borrow cash online through CreditFresh via a personal loan. As long as you meet the best personal loans requirements, you can fill out an application online. That application could get approved and give you the help you need to get out of this tricky situation.

Where should you keep this savings fund? 

Your emergency fund should be in a high-yield savings account or a money market account. Both of these accounts are easily accessible and they provide strong annual percentage yields, which will encourage your balance to grow with interest over time. 

2. An Opportunity Fund

An opportunity fund is a savings fund that you can rely on when you feel like making a big lifestyle change. The savings can help you jump onto the opportunity instead of watching it pass you by. So, if you were tired of grinding through your current job and looking for a career change, you could use your opportunity fund to make that change happen. You could use the money to sign up for a training course or school program in the career field you’re interested in. This fund could help you set your escape plan in motion.

Where should you keep this savings fund? 

You should keep this savings fund in a standard savings account. The savings account should be separate from your other savings funds. You don’t want these balances to blend together. 

3. A Retirement Fund

Do you have any retirement savings yet? If not, you need to fix that. You will need to set up a significant nest egg for yourself to support a comfortable lifestyle in your golden years, so you’ll want to give yourself plenty of time to save and build up a balance. 

Without a retirement fund, you might not be able to maintain your lifestyle when you decide to leave the workforce. You will of course receive government benefits, but those might not provide enough financial support for you. You might struggle to make ends meet, or you might delay your retirement and stay employed so that you can have a larger stream of income. The older that you get, the harder it will be to keep up with a full-time job.

Where should you keep this savings fund? 

You should keep this savings fund in an individual retirement account (IRA). This is a tax-advantaged retirement savings fund that isn’t tied to your employer — unlike a 401(k) plan. An IRA comes with various investments that should help your balance grow significantly over a lengthy period of time. After all, you shouldn’t be making withdrawals until you’re in your retirement years. At minimum, you will have to be 59 ½ years old to make a withdrawal from your account to avoid being charged an early withdrawal penalty

So, what are you waiting for? You need to get started on these savings funds right away!

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