Saving for the Future: 14 Essential Things To Save For

Setting and sticking to a budget is easier when you have goals you’re working toward. You don’t only need to save for major goals like retirement. You can also allocate funds or save for vacations, hobbies, entertainment, education and taxes. Start with this list of things to save for and create a budget and plan to help reach your savings goals.

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

Key Takeaways

• Save beyond retirement to cover needs like an emergency fund, a home down payment, vacation, a car, hobbies, electronics and annual bills so you avoid high-interest debt.

• Use percentage-based guardrails to stay on track — keep housing under 30% of income, transportation between 10% and 15%, and aim to put 20% toward retirement and long-term investing.

• Build savings in three steps by creating a budget, cutting nonessential purchases and automating transfers to a high-yield savings account each payday, so progress happens without willpower.

Summary generated by AI, verified by MoneyLion editors

1. Emergency Fund

An emergency fund can cover unexpected expenses, including medical, car, house or other expenses. Financial experts recommend saving three to six months of expenses in a separate account for surprise events.

Here’s what that might look like in practice:

• If your monthly expenses are $3,200, aim to save around $9,600 to $19,200.

2. Homeownership

To buy a home, you might need to save for a down payment and closing costs to secure the property. You’ll also need to pay for a mortgage, insurance, maintenance, furniture, house appliances, gardening tools, equipment and a steady stream of other expenses. 

Most financial experts suggest budgeting up to 30% of your gross income for home expenses. Consider also setting aside 1% to 2% of the home’s purchase price each year for routine maintenance projects.

3. Vacations

Vacations can be important times to relax, rejuvenate and build meaningful bonds and lifelong memories. 

How much you choose to save for a vacation depends on the type you want to take, your overall budget and other financial goals. However, you should never take vacations that you can’t comfortably afford and it’s not recommended to go into debt to pay for a vacation.  

4. Car

Aim to save to purchase a car and pay it off within a few years to avoid high-interest costs, as interest payments can add up on new and used cars. In addition to savings for basic payments, consider annual car repairs and maintenance. 

In general, you’ll want to keep your transportation costs low but no more than 10% to 15% of your income. This includes car payments, insurance and fuel.

Consider this:

• If your monthly income is $7,000, plan to spend up to $700 to $1,050 each month for car payments, gas, maintenance and repairs.

• If you’ve paid off the car in full, this number could be considerably less, allowing more for savings each month. 

5. Hobbies and Recreation

Hobbies can add up. From sports and fitness clubs to knitting, camping, pickleball, golf or dancing, consider memberships, lessons and any other hobby-related costs. Even if you choose a free hobby like hiking, you might need gear. If you want to purchase larger recreational vehicles like an RV or boat, you’ll need to save for the purchase plus repairs or maintenance. 

Hobby and recreation budgets vary widely by family. Some families count recreation in their entertainment budget, while others allocate funds specifically for activities.

Look at your budget and interests to set realistic goals. Then look for lower-cost options of the same activities to enjoy your hobbies while saving more.

6. Gadgets and Electronics

Phones, laptops, cameras, earphones, speakers and other technology all add up. Create a technology budget to save for these larger purchases as needed. 

Computers can cost $800 to $2,000 or more, while smartphones cost $300 to $1,000 or more. Unless you need a computer or phone for work, consider whether you need a high-budget version or can save on simpler technology.  

7. Phone and Computer Applications

Any subscriptions you need for personal and business use, such as Microsoft, Google or editing software, can add up. Make sure to save annually or budget enough each month for monthly subscriptions.

Expect to spend $10 to $300 monthly on applications, depending on how many you use and individual costs. 

8. Entertainment

Saving for entertainment means more fun activities and makes sticking to a budget easier.

Entertainment can include going to concerts, movies, the theater or local events. It can also include sporting events, video games, board games or streaming entertainment subscriptions. 

9. Personal Development

Personal development includes any form of investment in yourself. This could be higher education, language lessons, cooking classes, books, singing, dancing or anything else you love. Investing in yourself can open new career opportunities, new connections or bring more happiness into your life.

Some people keep a set percentage of their total income for personal development — like 5% — while others choose to take a course each year or regular lessons. 

10. Annual Bills and Payments

Some bills get paid once a year, such as insurance plans, homeowners insurance, property taxes, tuition payments, car registrations or gym memberships. Saving for annual bills each month can ensure you have enough before the bills appear. 

11. Retirement

Saving for retirement is one of the most important steps you can take for long-term financial freedom. Here are some steps you can take:

• Capture your full employer match.

• Contribute to a health savings account (HSA).

• Fund an individual retirement account (IRA).

• Invest in a brokerage account.

Aim to save 20% for long-term saving and investment goals. You can speak with a financial adviser to create a diversified, risk-balanced investment plan for your goals. 

12. Health Expenses

Health expenses are one of the areas where families often get caught without enough savings. The best way to prepare is by having health insurance that covers all types of procedures you might need.

When choosing a plan, you’ll likely come across these terms:

• Premium: Monthly insurance cost

• Deductible: What you pay before coverage kicks in

• Copay or coinsurance: Your share of cost

It’s also important to budget for everyday health needs, like nutritious food and regular activity, which can help reduce long-term medical costs.

13. Taxes

With each paycheck, you’ll need to put aside money for taxes. If you're a W-2 employee, you can use an online tax calculator to estimate your total income tax obligation. Remember to calculate both federal and state tax obligations based on current annual income.

If you’re self-employed, you’ll also need to put aside self-employment taxes and pay quarterly estimated taxes. 

14. Starting a Business

If you want to start a business as a side hustle or transition your career, consider saving ahead of time to cover startup costs. Save a little extra each day or each month to create a cushion as you launch the business.

Of course, if the business requires a larger budget, you can also look into getting a small business loan or a personal loan. 

Why Is Saving Money Important?

Saving money for certain things can allow you to achieve financial security and stability. Try to plan ahead and save for big and small expenses so you don’t have to take on debt and get stuck with high-interest rates.

MoneyLion offers a convenient marketplace to compare high-yield savings accounts from our trusted partners that could help grow your money.  

How To Save Money in 3 Simple Steps

Here are three simple steps to help save more money this month. 

Step 1: Build Your Budget 

• Time: 30 to 45 minutes

Create a budget that outlines your income and expenses.

• Start by tracking everything you spend and make in a month.

• Determine how much you can save each month by subtracting your expenses from your income.

• Your budget should include all essential expenses, including housing, transportation, utilities, food, healthcare, insurance, savings and extras like hobbies or entertainment expenses. 

Step 2: Reduce Unnecessary Spending

• Time: Ongoing

When you want to save more, consider a no-spend challenge or reducing unnecessary expenses. This includes the following:

• Reducing dining out

• Canceling unused subscriptions

• Finding cheaper alternatives for certain products or services

Whether you cut back expenses entirely for a short time or regularly review all extras, this step can save anywhere from $10 to $1,000 per month. 

Step 3: Automate Your Savings

• Time: 5 minutes

Plan to pay yourself each paycheck by transferring funds to savings before allocating money to other expenses. Set up automatic transfers from your checking account to a separate savings account.

Doing this will help you stay consistent and disciplined with your saving habits. 

Final Take: Setting Savings Goals

Whether you earn $30,000 or $300,000 per year, prioritizing savings means you’ll have money when you need it most. While some types of savings are essential, others can help you afford extras, like vacations, a new hobby or a work-optional lifestyle.

Start small, surround yourself with supportive people, make saving automatic and keep building to watch your savings grow. Before you know it, you’ll be able to set and achieve even bigger goals.

FAQs

How do you stay motivated to save for your goals?

To stay motivated to save for your goals, get support from family and friends. You can also set both short-term and long-term savings goals to get the satisfaction of reaching each goal. 

How often should you review your savings goals and progress?

Consider reviewing savings goals and progress every three months. Review your income, budget and discretionary spending to adjust savings goals as needed. 

Should you save money in a regular savings account or invest it?

Plan to save an emergency fund with three to six months of expenses in a high-yield savings account. Then, invest the rest in a 401(k), IRA or other retirement account, and put any extra savings in a brokerage account.

Key Terms

• Emergency fund: Money you set aside for unplanned expenses or financial emergencies, so you can cover surprise costs without relying on debt.

• Savings account: A deposit account for money you want to keep safe and use later, not for everyday spending.

• Deductible: The amount you pay for covered healthcare services before your insurance plan starts paying.

• Individual retirement account (IRA): A tax-advantaged account that helps you save and invest for retirement outside an employer plan.

• Estimated tax: Tax payments you make during the year on income that is not subject to withholding, like self-employment income.

Summary generated by AI, verified by MoneyLion editors

Sources

• Federal Deposit Insurance Corporation. "Deposit Accounts."