Struggling to take that first step to financial freedom? If you are, don’t despair. Read on to see how these five savings goals will change your life.

The big question most of us struggle with is this:

Which should you do first; save for the future or pay for the past?

I think you need to do a bit of both, too often debts accumulate because we were unprepared for an expense. Whether it’s an unexpected repair on your vehicle, a run of bills all at once or a major medical expense, if you’re unprepared, not only are those situations extremely stressful, those expenses inevitably add to your debt. Personal loans, credit cards, payday loans; they soon start choking the life out of your budget.

Actively planning for these things can take a huge weight off your mind and your wallet. Here are five things you need to begin actively saving for.
frugal living tips - life changing savings goals

Paying Off Debt

Make clearing your debts a priority. Start paying them off and make a commitment to avoid taking on any more debt. Debt weighs you down both financially and emotionally. You deserve better than that! It’s never too late to take control of your spending and start paying off your debts.

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Saving for Emergencies10 simple and easy ways to save $1000 per year.

While you’re paying off debt, start saving into an emergency fund. Like your debt repayment, make it a priority. Even if all you do is choose to forgo eating out for a month or two and transfer the money you would have spent into an emergency fund, you’ll be amazed at how quickly the balance grows. Not to mention how good it feels to know it’s there.

Related Post: The Secret to Paying Off Debt

Saving for Retirement

Retirement planning can come in many different shapes and sizes and what works best depends on your particular situation. The bottom line though, is that you need some sort of long term savings. It can be in a specific retirement fund or you can put a percentage of your income into a low cost Index Fund, either way you’ll have a financial cushion of some sort down the track. How big and comforting that cushion is will depend on how much you stuff into it over time. Saving consistently is the key to a comfortable retirement.

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Repairs Fund

Unlike emergencies, you know repair jobs will happen. Cars need maintenance, washing machines break down (usually when they’re half way through a load) and gutters get blocked. The smart thing to do is plan for them. Pick an arbitrary amount and start putting it aside, just for repairs. It might not cover the entire repair job the first time you need it, but then again, it might. That means one less ‘emergency’ added to your debt load.

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Yearly Expenses

The easiest way to pay for yearly expenses is to build them into your budget. List all the bills that turn up once or twice a year and divide by the frequency of your pay day: weekly (52); fortnightly (26), etc. Obviously you’ll need time to build the account balance to cover all your yearly expenses but the amount you’re saving each payday will add up quickly.

Related Post: How to Fix Your Budget When it isn’t Working

You might not be able to tackle saving for all five at once, but you can start on the first two: pay down your debt and start accumulating an emergency fund. You might need to do the hard yards for a couple of months but once you see the debt balances going down and the emergency fund going up, you’ll feel a great sense of accomplishment and want to keep saving.

Saving Those Extra DollarsSmart money secrets from the great depression. Skills and knowledge that will help you save money and be more self-reliant today.

If you need some ideas for saving those extra dollars, check out these posts:

If you’re interested in starting a side hustle to bring in a few more dollars, check out these posts:

Do you have all five areas covered? What can you change so you can start working on these goals now?

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