Should I Save for Retirement or Emergencies?

Should I Save for Retirement or Emergencies?

Having a well-stocked emergency fund is important. But so is saving for retirement. So how do you know which one to focus on? Well, we’ve got you covered. Here’s what you should know.

Emergency Fund is Important

An emergency fund is extremely important. If something unexpected happens, you don’t want to be completely unprepared. When deciding on saving for emergencies or retirement, you should consider your personal goals.

• Small Short-Term Goals. Start by identifying manageable savings milestones, such as saving a specific amount each month or reaching a set total within a few months. This helps create a habit of saving while you build your emergency fund.
• Get at Least Six Months. When saving for your fund, shoot for saving enough to cover six months of fixed expenses. In reality, you probably want more than that stashed away, but six months is the bare minimum.

Retirement Savings is Also Important

Saving for retirement is just as vital as an emergency fund.

• Get the Match. If you have an employer match for a 401(k), try to make that your first retirement savings goal. That’s free money being offered to you.
• Start Small. If you don’t have an employer-sponsored retirement plan, begin by saving whatever you can each month, even if it’s a modest amount. The key is to create a habit of saving for your future.
• Shift Priority. Once you have your emergency fund stocked, shift your focus to retirement and make it a priority.

It’s Okay to Juggle

Financial goals don’t always fit into a strict plan. Sometimes, adjusting as you go is exactly what you need. What’s important is that you’re working toward the essentials, like an emergency fund and future security. Saving takes time and discipline but is well worth the effort.

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