Planning for the future, particularly when you don’t know what could be around the corner, can feel overwhelming. And it’s that overwhelm that can often cause people to do nothing and only think about their immediate financial needs. 

 

But having a safety net to fall back on, should the unexpected happen, can be a significant stress reliever and give you one less area to focus on if the worst should happen. We’re here to help you understand the basics of saving, whether it’s for a planned expense or something unexpected, and take simple actions to prepare for the next steps.

Middle-aged woman sitting cross-legged on a rug on the floor holding red hand weights.

Build Your Emergency Fund with a Savings Account

Many financial experts recommend having around three to six months of living expenses saved in an emergency fund. This is one of the best ways to have peace of mind and tide you over if you face periods of unemployment, an unexpected medical bill, or unplanned home repairs at some point in the future. 

 

If you don’t currently have an emergency fund, this should be your priority savings goal. Think about the type of savings account you want this money to live in. Accessibility is the most important factor here, so a high-yield savings or money marketing account will likely be your best option.

 

To ensure consistent savings, set up automatic transfers from your personal checking account into savings each month. Use tools like savings calculators to set and track your emergency fund savings goals.

Secure Your Retirement with an IRA

Start saving for your retirement as early as possible—it’s never too early to start thinking about retirement in Illinois, whether you plan to stay local or venture further afield in your golden years. Individual Retirement Accounts (IRAs) are a great way to start saving while also enjoying some tax benefits now.

 

Traditional IRAs are often tax-deferred, meaning you’ll pay taxes on that money when you withdraw it in retirement. Roth IRAs, though, are paid with post-tax dollars and can be withdrawn in retirement tax-free. You can use your IRAs to invest in a variety of assets, like stocks, bonds, and mutual funds.

 

Stay informed about your contribution limits to maximize your savings. As of 2024, both traditional and Roth IRAs have a $7,000 per year maximum contribution if you’re under 50. You can then increase this to $8,000 a year once over 50 as a catch-up. 

Earn More with Certificates of Deposit (CDs)

If you already have some money set aside that you don’t need to touch for a while, consider investing in a certificate of deposit (CD) account. These typically offer higher interest rates than standard savings accounts, as you won’t be able to access those funds for the term length of the CD.

 

Instead of relying on fluctuating market conditions, CDs have a fixed interest rate at the time you start them, so can be a safer way to grow your savings over time. If you use a CD laddering approach, where you open multiple CDs with varying maturation dates, you can maximize your savings even more thanks to compound interest.

 

Because these accounts are for a set period of time, there are usually early withdrawal penalties associated that you should be aware of.

a classroom of adults

 

Plan Big Expenses with Personal Loans

Most people don’t want to be in debt, but they associate this with credit cards rather than other types of loans. Some loans, though, can be helpful, such as a personal loan. This is a good alternative to a credit card, as it often has competitive rates and flexible terms that help you make your big plans a reality without the high-interest stress of a credit card.

 

Personal loans also have fixed monthly payments that make budgeting much easier. You can use these loans for all kinds of purposes, like consolidating high-interest debts, medical expenses, or home renovations.

Achieve Home Ownership with a Mortgage

Owning your own home in Illinois is a significant milestone and a solid investment in your future. You can choose between fixed or variable-rate mortgage loans, depending on what works best for your financial situation. There are also many different down payment assistance programs available statewide and nationally to help you get on the property ladder.

Save for Your Child’s Education

Preparing for your child’s future education is one of the best investments you can make. Explore your options, like education savings accounts of 529 plans, many of which offer tax advantages that can help your child save for tuition, books, and other education expenses.

 

You’ll enjoy tax-free growth and withdrawals when using a 529 education plan for qualified educational expenses. And it’s not only college that these plans can be used for. You can fund K-12 tuition and expenses using many of these accounts, along with trade schools if your child decides to take a less conventional college path.

 

For 2024, the contribution limits are up to $18,000 per beneficiary per year without triggering the federal gift tax. Married couples can contribute up to $36,00 per beneficiary. There’s also an option known as superfunding, which allows you to make up to five years of contributions are once, which means you can fund these education accounts with up to $90,000 per beneficiary without incurring tax penalties.

man standing and looking up at two arrows, one says "old way" and the other says "new way"

Get Professional Help with Financial Planning Services

If you’re not sure what your savings goals should be, stop in at a Flanagan State Bank branch and talk to our advisors. We can help you with wealth management, retirement planning, education savings, and even helping you save a down payment for your first home, thanks to our Nest Egg program.

 

We’ll work with you to provide tailored advice and investment strategies that align with your current situation and your goals for the future. You’ll also benefit from ongoing support and recommendations that we can adjust as your financial or personal situation changes over time.

 

Knowing where to start with investing can be confusing and overwhelming, but we want to make it as easy for you as possible. We’ll help you make your money work for you and take you closer to your big goals.

Grow Your Business with Business Loans

If you’re a business owner or hoping to become one, thinking about the future of your company usually involves growth and expansion. With that often comes the need for a cash injection. Consider how a business loan can help you take your business further, with many offering competitive rates that make borrowing for your business more affordable.

 

Business loans have flexible terms that can fit your cash flow, with different repayment options to suit you. You can use these funds for anything business-related, from expanding to a new location to buying new equipment, providing working capital for inventory, or hiring new team members.

A mature man and woman sitting on a couch looking at a computer; the man is holding a paper and the woman is holding a coffee cup.

Be Prepared with Flanagan State Bank

At Flanagan State Bank, we’re here to provide you with the tools you need to have a successful financial future. For more information and personalized advice, stop by one of our branches and talk to our experts. Let’s make your financial future bright and secure together!