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Beyond Emergency Savings — Start Saving for These Priorities

By now, you’ve probably heard how 40% of Americans can’t afford to pay cash for a $400 emergency. That’s why having a fully-funded emergency savings account is so important. Opinions vary on what exactly fully-funded means, but most experts agree that saving 3-6 months of living expenses in an accessible savings account should be the ultimate goal. But what happens then? Once you’ve accumulated your emergency savings, should you just stop? Absolutely not! Here’s what to start saving for beyond emergency savings.  Here's what to save for beyond emergency savings

A New Vehicle

If your current vehicle is more than a few years old, you’ll want to start setting money aside to buy a new one. Even if you plan on keeping your current vehicle long-term, you will eventually need to get something new. By saving for it in advance, you can amass a substantial down payment, or even enough to eventually purchase a vehicle outright and not have to worry about car payments.

Home Improvements

When it comes to using your emergency fund, there’s a big difference between home repairs and home improvements. When it’s an urgent, immediate need it’s fine to dip into your emergency savings to pay for it. But aesthetic or lifestyle upgrades aren’t emergencies. If you want to add a pool, have the house painted, or redo your bathroom, those don’t count as emergencies. You’ll want to set up separate savings for those upgrades and wait to do them until you have enough to pay in cash.

Medical Expenses

Once again, it’s fine to dip into your emergency savings in the event of a true medical emergency. But it’s better to set aside funds specifically to go toward your co-pays, annual deductible and prescriptions. If you have insurance coverage that includes the option of contributing to a health savings account (HSA), be sure to take advantage of it. That’s tax-deferred money that travels with you — even if you leave your current job.

Travel & Vacation

Although it may feel like an emergency sometimes, the need to get away from it all isn’t a good reason to dip into your emergency savings. But that doesn’t mean you can’t make it a priority that you intentionally save for. By setting aside money specifically designated for travel and vacation expenses, you can truly enjoy your getaways knowing you’re not going into debt by using credit cards to pay for them.


Whether saving for your children’s higher education or you plan to return to school someday yourself, you’ll want to start saving for it now. The sooner you start and the more you save, will allow you to reduce the amount of student loan debt. It’s easy to rely on student loans in the moment, but always keep in mind that either you or your children will have to pay them back eventually.

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