Graduated Learning: Life after College

I got my degree, I got a job…now what?

What are you saving for? December 7, 2008

Filed under: Personal Finance — Stephanie @ 6:03 pm
Tags: , ,

I was updating my net worth calculations, and it got me thinking:  What am I saving for?

My current financial goals are not very specific.  Many pf bloggers have noted their short and long-term goals, often using nifty status bars.  They’re saving for an emergency fund, or a new puppy, or a down payment.  And I realized that I’m just saving to be saving.  At least for the short term.

My goals are stepwise.  First goal is to have a positive net worth.   Then I want to eliminate all debts (currently $60k+ student loans and $17k+ car loan).  After that, I guess I’d be saving for a down payment.

I think I’m sometimes just saving for the future, but I have no idea what I’m going to use that money for in the future.  Will I be buying a house?  I hope so, assuming it’s the right time and place for it.  And if marriage and kids are in my future, will I be paying for the wedding?  I’ll need money to raise kids, and maybe consider putting money away for their college education.  But really, I think I’m just hoarding money, with the intent of having it around in case I find myself in need.  It’s almost as if all of my savings is one big Emergency Fund.  The money’s there if I need it, but I don’t really have a plan of ever using it.

I realize that I could probably use some of my savings to pay down my debts.  But I just feel safer having a larger emergency fund than having a smaller debt, even though, mathematically, it’s not the best choice.

Should I start creating a “fund” for everything?  My long-term financial goals seem so far away.  I feel like I’m just saving and avoiding spending, and hoping that it will all fall into place.

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10 Responses to “What are you saving for?”

  1. Systematic saving is the key. You’re definitely wise to be thinking about the big picture, but make sure you realize that the key is exactly what you’re doing: minimizing spending, paying with cash, and setting short-to-medium term savings goals so you reward yourself for your discipline. Saving doesn’t have to suck…but it does take dedication and self-control.

  2. I first building my emergency fund and paying off my credit card debt. When I have a reasonable amount saved and have paid off my credit card, I will start saving for a car. The next step would be tackling my student loans while saving for a home down payment. These goals seem kind of far away right now, but I have to start somewhere.

  3. Getting into the habit is key for saving, that’s for sure. But for me, I always have to try and remind myself that I don’t have unlimited money.. it’s hard but it helps having a BF who’s super frugal, so frugal, it scares you into saving

  4. I think that’s part of the problem with people our age. Not everyone has such concrete savings goals, and it can seem almost pointless to be saving if not for something specific….especially if there’s something right now that you WANT!

    I think you’re doing fine though…at least you’re in the habit of it so that when you finally do figure out what you’re going after you not only KNOW how to save, but you’ll have a nice balance in your accounts.

  5. Kendall Says:

    Hey Steph!
    So I’ve been thinking about this as well. How much is recommended in the emergency fund? enough for 2 months? 6? Because I have some saved, but I don’t know at what point I would be better off putting it into my car loan instead of my emergency fund. Maybe pretty soon here I will just start putting away $100/mo instead of 200 for the emergency fund and send the rest to the car loan … it’s amazing. It’s been 4 months and I’ve already incurred about $140 in interest. It really makes me want to pay it off sooner. What do you think?

  6. Sarah Says:

    First, I’m getting myself a new TV for my birthday. 🙂 After that, a house. Then a wedding. Then kids. All four of them! Crap, I’m going to need a raise… 😛

  7. Stephanie Says:

    All: Thanks for your encouragement. I agree that many people our age are in this situation, and I find it comforting that many of us are saving for similar reasons.

    Kendall: I’m not an expert, but I think maybe 6 months would be a good place to start. The money’s there in case an unexpected expense comes about, or you find yourself without your usual level of income. So, you need to think about monthly expenses, but also extra expenses such as health insurance and job search costs.

  8. […] to buy anything until further down the road of my financial, personal, and professional life.  I mentioned a while back that my financial priorities are first to eliminate my student loans and car debt prior to getting […]

  9. […] a down payment fund?  Because I realized I have just been saving for the sake of saving, and if I have an actual “goal” in mind (i.e. buying a house), I might be more […]

  10. Fantastic post, I’ve just subscribed to your feed, you’ve earned yourself a fan with this post.


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