A New Approach to Saving: Now, Soon and Later

Most of us can agree that saving consistently is a smart money move. Different people save money for different needs and goals, but generally, we all rely on savings to help us cover financial emergencies, reach our goals and fund our long-term dreams.

Saving money is a lot easier when you have a clear purpose for the money you're setting aside. One approach is to organize your savings into three categories: Now, Soon and Later.

Here's how to get started, no matter where you are in your personal financial journey:

“Now" Savings

These savings help you cover immediate changes to your finances, such as a shortfall in your income or an unexpected expense that throws your budget off track.

“Now" savings provide peace of mind for life's unpredictable moments, such as:

• Loss of hours or income
• Unexpected home or vehicle repairs
• Emergency room visit
• Higher than expected credit card or utility bills
• Sudden spikes in everyday expenses, like groceries

Ideally, your “Now" savings will help you cover at least three months of essential living expenses. If you're just getting started, an emergency fund with at least $1,000 in it will give you a good foundation to build on! 

Where to keep your “Now" savings

Because you'll need your “Now" savings quickly in the event of an emergency or life change, keep them in a safe, easily accessible account such as a Wright-Patt Credit Union (WPCU) TrueSaver^® savings account or Money Market Account.

“Soon" Savings

These are the funds you're setting aside for short to mid-term expected goals and expenses — the spending you know is coming in the next few months.

Your “soon" savings should be a natural part of your budget, helping you plan for future expected expenses such as:

• Buying seasonal clothes or school supplies
• Scheduled vehicle maintenance or upgrades
• Planned home renovations​
• Saving for vacation
• Meeting a debt reduction goal
• Premium insurance payments
• Annual tax bills

What expenses do you have on the horizon? It can help to look back at your credit card or account statements from the past year as you make a plan.

Where to keep your “Soon" savings

It's wise to separate your “Soon" savings from your “Now" savings. To keep your money organized, consider setting up secondary share accounts for each of your “Soon" savings goals.

From there, use WPCU's Mobile and Online Banking to set up small, automated transfers on your paydays or on a weekly or monthly basis.

“Later" Savings

These savings support your long-term goals and dreams that you want to achieve one day.

What goals and dreams do you have for your future? Here are a few examples:

• Saving and planning for a child's college tuition
• Starting and funding your retirement plan
• Paying for a wedding or large special occasion
• Purchasing a new home or vehicle
• Paying debt down and off
• Major home repairs or renovations

The more time you give yourself to save, the more time your money will have to grow. That's why it's best to start saving early! 

Where to keep your “Later" savings

For funds you don't necessarily need right away, consider a high-yield savings option such as a Share Certificate. If you're saving for your child's college education, a 529 college savings plan is an option that allows your funds to grow tax-free.

When saving for retirement, it's a good idea to start with your employer's retirement plan, if one is offered. From there, you can look into an Individual Retirement Account (IRA)* and other retirement planning solutions.

Saving money on a consistent basis is one of the best ways to achieve greater financial flexibility and freedom. This means having the flexibility to weather life's storms and challenges as they arise, as well as the freedom to take advantage of opportunities that may come your way!

Learn how to save better for now, soon and later with WPCU's helpful tools and resources, including savings tips, budgeting and planning worksheets, and interactive learning modules on topics like building emergency savings and savings accounts.