Allocate your savings

As you plan for the future you envision, are you allocating your money appropriately? If you’re like many people, you may be worried about managing multiple priorities, paying off debt, planning for a future large purchase all the while saving for retirement. Or simply put, you may just be trying to make it by each month.

A few common thoughts that come up are:

• What am I saving for/I have too many savings goals
• How much should I be saving each month to reach X amount of money?
• How long should I save for?
• How can I even get started saving?

Understanding the different types of savings accounts that are out there and how they can work for you is an important step when it comes to planning for your future.

Here are 5 types of savings buckets that you should consider:

• Household – when it comes to saving for everyday needs, utilizing a household budget is key to making sure you balance your spending and saving. Understanding the balance between your needs, wants and savings can be helpful when it comes to understanding your future financial goals. Build your household budget with Voya’s Budget Calculator.
• Emergency – do you have enough cash to cover an unexpected situation? Making sure you set aside money specifically for life’s unknowns, can help you from going into debt or taking out a loan, when life happens. Learn more about the importance of an emergency fund, how to get started building one and how much you should stash away.
• Health – We have heard that health care continues to be one of the largest expenses in retirement. Having a separate account for health-related expenses is important in making sure you don’t have to dip into your retirement account or other savings accounts to pay for medical expenses. Whether you have access to a Health Savings Account through your employer (check out the tax deductions on this!) or create a separate savings account for health-related expenses only, assigning specific dollars to current and future medical costs can help you enjoy your retirement dollars that much more. Learn more about a Health Savings Account.
• College – are you planning to support a student when they go to college? If college is on the horizon and you’ll be helping to foot the cost of college, then consider the different types of college savings accounts available to you. Whether it’s a 529 Savings plan, an Educational Savings Account or a Uniform Gifts to Minors Act/ Uniform Transfers to Minors Act (UGMA/UTMA), do your research to make sure that you are able to help support their future, without losing sight of yours. Watch this video on saving for college for more information.
• Retirement – Retirement looks different for everyone but the path to retirement is generally the same. Save, save, save. Make sure to take advantage of all your savings options so that you can enjoy life in retirement. Taking advantage of employer match, maxing our your contributions and setting up a separate IRA are just a few ways to get started. Check out Voya’s myOrangeMoney® Retirement calculator which helps you see how much you may need and your progress toward that goal.

Remember that everyone’s financial plan is different. If you need additional help, consider consulting with a financial professional.

It’s never too late to start saving for the future you envision.