Smart Savings

When you’re saving for a rainy day, what exactly should you save for? We’ve got some ideas on what types of emergencies may pop up on that “rainy day” or what you should be saving up for.

1. What counts as an emergency?

When people talk about emergency funds, there are more that falls under that definition than just medical emergencies. Some common surprises in addition to medical emergencies include a sudden job loss, surprise moving expenses (for example, if your office transfer you to another city), increase in cost of living, car repairs, household repairs and unplanned travel (such as for the loss of a loved one). This   article by Holly Perez goes more in-depth to what each situation constitutes.

2. Being prepared for repairs

Unexpected repairs can be a lot pricier than you imagine. For example, the average cost of a refrigerator repair can range from $900 to $8,000, and even a washer ranges from $350 to $1,000, according to an   from Quicken. When these appliances we take for granted decide to clock out, it’s nice to have the emergency funds to cover the costs and keep life rolling along.

As for those who have cars, the average maintenance cost per car was $537 in 2012, according to the  , and that’s not even including insurance and surprise repairs. Perhaps you accidentally hit a deer, your tail lights go out, or you need new brakes; these are all repairs that need immediate attention for the safety of yourself and others. Having a savings account devoted to the unexpected can decrease the level of concern and stress if these situations arise.

3. Common goals to save for

If you’re still searching for things to save up for, this  from Quicken can give you a few ideas. The most-saved for category is retirement with 58 percent of Americans saving for the era after working. Other common goals include buying a home or a car and also going out of debt, be it from student loans or other loans from this article on  . If you still want some ideas on what to save for, find a place you’ve always wanted to go, whether it be domestic or international, and set that as a goal.

4. Smart saving and smart spending

Part of smart saving is to stay out of debt. The first of the four worst financial mistakes presented by Amy Livingston from   is not saving enough. The second worst mistake is, spending too much. Both of these combined set people up with having to play catch-up just to have $400 for emergencies without having to take out more loans. Live within your means and set goals for your future to stay in the green.

Regardless if you just got your first job or you’re starting to think about your finances at 50, it’s not too late to adopt productive and efficient saving goals and practices. As this article from   recommends, “Start budgeting today for the lifestyle you want tomorrow.”