Savings Strategies for Different Ages and Stages

3 min read

It’s never too early or too late to save smart.

It’s never too early or too late to save smart. But as your lifestyle and needs evolve, so should your savings strategy. Here are some things to think about as you and your family move from one stage to the next.

Children

Starting the saving habit early can help children succeed later in life. What’s the best way to get the habit to stick? Practice, practice, practice. Consider encouraging children to set savings goals—for short-term wishes like a toy or a treat and for long-term goals such as buying a car someday or going to college. Think about teaching kids to set a portion of their allowance aside for their goals, every week.

College students

If you’re a student learning to navigate having more personal freedom and making your own day-to-day money choices, consider a “hands-off” savings account with a high yield as part of the mix. While you may not make a lot of deposits to a savings account during your college years, try to reserve withdrawals from savings for emergencies or unexpected expenses.

Young adults / starting career

The first paycheck is exciting, and it can seem like a lot of money for someone who’s grown accustomed to living on a student budget. Enjoy your growing financial independence, but consider setting up automatic savings, via direct deposit or electronic transfer, from that very first paycheck. In addition to investing in a retirement plan such as a 401(k) offered by an employer, you may wish to arrange to have an additional amount automatically deposited into a savings account with a high yield. Then, think about increasing the amount you save whenever you receive a raise or a bonus. Starting early will make it easier to save, and, hopefully, you’ll end up with an emergency fund for life’s little surprises.

Families

A sudden job loss or medical emergency can be easier to manage when you have cash set aside in a rainy day fund. Help put your mind at ease by keeping a few months of basic living expenses stashed in an online savings account so you’ll be ready. If college is on the horizon, certificates of deposit can be a great way to lock in rates and may help you earn more over time. Consider using a CD ladder to take advantage of longer-term CDs with higher certificate of deposit interest rates while keeping some money more easily accessible in shorter-term CDs.

Nearing retirement

As your retirement years approach, think about continuing to make deposits into your savings account to build your cash reserves. Watch your calendar and pay attention to your CD maturity dates to make sure funds will be available when you need them.

Everyone at every age

Wherever you are in life, these smart money tips could help build and grow your savings:

  • Shop around for online banks with savings accounts and CDs with higher interest rates.
  • Choose accounts with no monthly or transaction fees so you can keep more of your hard-earned money.
  • Automate deposits into your online savings account. Good money habits (like making regular deposits) can make it easier to keep up when you get a little day-to-day help from technology.

This article is provided for informational purposes only and should not be considered and is not a substitute for individualized professional advice, which you are encouraged to seek. The views in this article may not necessarily reflect the institutional opinions of Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions and none of the foregoing, unless prohibited by law, assume any liability for loss or damages resulting from reliance on the material provided.