One of the scariest things in the world, by far, is being a parent. I don’t know who told me that I was qualified, capable or even in the least able to bring a child into the world let, alone raise it! But, here we are, parenting.
Admittedly so, it’s one of the most selfish acts one can undertake. Taking on the
responsibility of providing for, guiding and generally just being available to a mini-human because of society’s expectations or one’s biological clock is pretty cray. C’mon! Don’t lie to yourself.
As much as this parenting gig stresses me out, has me doubting my abilities constantly and generally has me in a constant state of simmering anxiety, I’m incredibly happy and grateful to be on this journey. This isn’t for everyone, but those passing moments where you see a glimmer of growth, a spark of joy or anything of the like is pretty amazing.
All of these magical moments with a hint of simmering anxiety constantly have me thinking, am I doing enough for her? Nine times out of ten the answer is no. My little one wants a pool and jacuzzi in the backyard and I’m here trying to figure out how to save up money to remodel my over fifty-year-old home. Sorry girl, that Architectural Digest dream backyard will have to wait.
So, what am I doing now to reach my financial goals? Take a little peek-see below. It’s the, I’m now starting to see a flicker of light somewhere down this deep tunnel Savings Starter Pack.
4 Types of Savings Accounts
Emergency Fund
Everyone and I mean, everyone should have an emergency fund set up. This should cover at least three months of your monthly expenses.
401k Retirement Fund
A 401K fund can be set up through your employer. On average, one should put at least 6% of your salary towards the fund. Pre-marriage and baby, I used to do 12%. If your company matches any percentage of your participation on the account, take it. It's literally free money. Not to mention, this is all pre-tax. Depending on the type of account, you can actually manage the funds to get a higher return.
Mutual Funds
To set up and open a mutual fund, you will need to do some research. This requires, looking up funds, reading the company's financial reports and annual returns. Most funds require a minimum amount to open the account, but if included in your budget to save to open an account it does have it benefits. It's a good way to start investing without day trading. You can continue to add to the account monthly.
529 College Plan
This one is similar to both the 401k and mutual fund. You are able to set up an account and make monthly contributions to the account long term without giving it much thought aside from the occasional check-in. You can set up a moderate to high risk account depending your risk appetite and time restrictions. There a few caveats for this account. Only the beneficiary of the account can receive the funds for educational purposes. If the beneficiary eventually chooses not to attend college, the account can only be transferred to another beneficiary. Each state has varying guidelines and you can open an account with another state regardless of residency.
What I particularly like about these accounts is the ease. They do not require a great deal of attention. It's important to do your due diligence beforehand and check-in every once in a while, but ultimately, it's easy - relatively speaking. Also it's a good blend of different types of savings, immediate and long-term. They can take the edge off retirement and college due to the tenure of the accounts.
Honestly, just do what you can. As you keep working towards your goals, new paths will and can start to open. Just keep an eye out!
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