You may have gathered from my weekly posts on ‘What I Did This Week to Save Money’ that we are very tenacious about trying to end our week with some surplus money to put back into savings, but what are we saving for, anyway?
We have two main financial goals for 2013 in addition to the usual budgeting practices of saving for kid’s college, participating in employer’s retirement program, meeting our charitable obligations, etc.
- Increase cash savings by 30% by the end of 2013. We feel this is imperative. We purchased a car with cash at the end of summer 2012 and need to replenish our savings. We like our savings to be comprised of enough money for a major home repair or a car, plus some additional cushion. This cushion is what keeps us from needing to borrow money. For more thoughts on “saving like no one else”, see this post.
- Fund each of our Roth IRAs up to the maximum contribution, if possible. The Roth Individual Retirement Account allows US residents to put after-tax money into investments for retirement, and when you retire, you do not have to pay taxes on the money again (hooray! presumably your investment has grown quite a bit). The maximum contribution is $ 5500.00 per year, per person, and you can contribute up until income taxes are due. If we do not fully fund the Roths this year, we are OK with that because we feel the cash savings is our greatest need right now. The Roth is only one of several ways we are saving for retirement.
So, are you going to sit around all summer saving money?
Definitely not! We planned and began funding a vacation and other summer activities in our budget many months ago. In terms of our budget, we are now starting to turn our attention to our money needs from August – December. I will keep you posted monthly on how we are progressing toward our goals!