4 Savings Goals to Budget For

Building a smart savings strategy is one of the most important tactics you can take to improve your financial well-being. Let’s talk about the different ways to save and how you can prioritize your savings goals.

Emergency Savings

An essential part of any budget, your emergency savings should be easily accessible and consist of enough money to cover three to six months of living expenses.

Being able to cover the unexpected, such as a job loss or medical emergency, can help prevent you from going into debt, and give you peace of mind.

Need to start an emergency account? Open an online savings account today. You can start small and eventually build up to cover several months of living expenses.

Remember that “living expenses” includes major necessities (bills, groceries, transportation) and not extras (restaurants, movies, clothes). Your emergency savings should only be used for true emergencies. Home improvements, vacations, shopping, etc. are not reasons to dip into your emergency savings.

Smaller Savings

Dreaming of your next vacation, in need of a new computer or planning for holiday shopping?

Whatever you have in mind, the best way to save for these types of short-term goals is with a smaller savings account dedicated to the planned expense. High-yield savings account options like a money market or certificate give you access to your money when you’re ready to use it¹, are federally insured by the NCUA and have a better rate of return than a traditional savings account.

Keep in mind that money in a certificate is held for a set length of time and usually is not accessible during the term. Therefore, certificates are a great choice if you want to set aside money you already have and won’t need to access for the length of the term.

UW Credit Union does offer a No Penalty certificate, which allows you to withdraw money from your certificate with no fees or penalties.² This is a good choice if you want easy access to your money and a high APY.

Are you a planner, saving ahead of time for property or income taxes? Our Smart Saver Plus Certificate is the perfect choice:

• Make monthly deposits
• Set up automatic, scheduled payments
• Withdraw money with no penalty in December

Bigger Savings

Goals that require more money and more planning, like a wedding, your first home or a college education, fall into the bigger savings category.

Calculate a rough estimate of how much you hope to save. Divide that number by the number of months you plan to save to see how much you should be saving each month. Creating a savings plan will help give you some perspective and keep you on track.

Set up automatic transfers to easily set aside money for these bigger goals. Again, high-yield savings account options like a money market or certificate give you access to your money when you’re ready to use it¹, are federally insured by the NCUA and have a better rate of return than a traditional savings account.

For education savings, consider a Coverdell education savings account (CESA) or 529 plan for additional tax advantages.

Retirement Savings

While other savings goals may vary, everyone should have a retirement savings plan.

Popular retirement savings options include employer-provided plans such as 401(k)s and SIMPLE IRAs, as well as private plans such as Roth and traditional IRAs.

There are three types of IRAs to choose from (Traditional, Roth and CESA) that can be held as either a savings account or certificate. If you are looking for an IRA with more investment options, Wealth Management at UW Credit Union can help.

In general, you’ll want to save at least 10 percent of your income toward retirement each year. Depending on your age, you may want to save even more.³ Why? Retirement savings needs to cover everything from bills to groceries to vacations to medical care, so it’s important you save enough to afford the comfortable retirement you deserve.

Savings accounts are a key building block in your financial well-being. Planning ahead for unexpected life events, small and large purchases and retirement will allow you to live comfortably and avoid taking on unnecessary debt.

Ready to start saving? UW Credit Union offers multiple options for savings accounts, which you can easily open online with just a few clicks.