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3 Tips for Long-Term Saving in a Single Income Household

 

Long term saving is just as, if not more, important as short term saving. Short term saving gives you and your family a reward at the end of a short period of, whereas long term saving is more for a goal based around retirement. When you live on a single income, it can hard to imagine how you can saving long term, but there are ways to get to your long term goal without breaking the bank.

1. Set a Goal

Regardless of how long you're going to be saving, you need to set a goal. Saving for long term usually means a bigger goal than short term because of the larger amount of money. If you're goal is retirement, you should take a look at your long term work status and potential after retirement benefits to help calculate how much you need in savings. While it can be helpful to know if you'll receive government benefits, like Social Security, don't rely on that as a source of income. Take the current annual cost of your life and determine if your lifestyle will be more or less after retirement.

Account for things you want to do in retirement and add a bit per year for inflation. Once you have a yearly number, you can take a look at what age you'd like to retire at and how many years of life that leaves after retirement. Obviously, this is just a guess. When you've calculated how many years you need to save for, calculate it down into years and months to save. This will give you a figure so you know how much per month and per year you need to put away now to have the lifestyle you want then.

2. Open a Separate Account

Open a high quality long-term savings account to stick money in. Check around for these because some have higher interest rates than others. See if your bank will give you a better deal for staying loyal. Once you've set up an account, make sure you know and understand the guidelines of that account. Many savings accounts are set up in a way where if you withdrawal money more than three times, your account will automatically be closed. While your goal is to save for the long-term, there may be emergency expenses that come up.

3. Set up Automatic Withdrawals

If you get paid on a regular basis, especially if by direct deposit, you can set up an automatic money transfer between your accounts. This will take your savings amount right off the top and make it easier for you to save. Most people don't budget in their savings contribution and end up not depositing money in their savings at all.

While a few simple tips and tricks, you can save even on a single income. Make long-term saving a priority, and you'll be prepared for the future no matter what it brings.

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