InvestED: Why Save?
In June of 2020, our family was on the hunt for a large vehicle that could fit our 4 growing kids and tow our camper. We found the perfect late model Yukon XL posted by a private owner on Facebook Marketplace in Chicago. After a test drive, inspection and asking questions about it, it seemed to check out, drive well and had lower miles and a better price than others we saw online. On the way home to Michigan from Chicago, the check engine light started blinking…when a light blinks, that is usually not a good thing. We immediately pulled over and had the car scanned to learn the reason for the blinking and learned…the transmission was going out. Yikes. Apparently, the car had to warm up more than a 20-minute test-drive to present the problem. We called the person we bought it from to get some context and he replied, “We sold it as is. We gave you a good deal on it.” Yikes. We have purchased many cars over the years and never had this experience.
When we meet with new clients, we often get questions like, how much should I be saving on a regular basis? Certainly, each client’s situation is unique and requires a different strategy, but a great number to shoot for is 10% of your gross income into a high-interest savings account. Why?
1. It prepares you for when the unexpected happens.
You never know when an unexpected expense pops up. It is also great to have savings because unexpected opportunities (deals on a vacation spot, a chance to see your favorite sports team, etc) might pop up. Having the money in a separate account typically takes 3 business days to get into your account, causing you to really consider whether you want to spend the money before calling in the reserves!
2. It protects you in the event that you lose your income.
We like to see clients have 4-6 months of their bare-bones expenses saved. If you lose a job, it allows you the opportunity not to rush into taking the first job that comes your way because you can live off your own savings – paying yourself. When you calculate bare bones expenses, include your housing, food, car payments, insurances – car insurance, health insurance, homeowners, life insurance and other basic expenses.
Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. File # 5492217.1
Jeremy Heavey
AIF ® | FINANCIAL ADVISOR
Jeremy is passionate about partnering with individuals and families to identify what is important in their lives and creating a comprehensive financial strategy to help them reach their life goals. This holistic approach allows Jeremy and the wealth management team to ensure the specific needs of the client are front and center as they make investment recommendations and collaboratively design custom-tailored financial plans.
Jeremy has a professional track record starting, leading, and managing for-profit and non-profit organizations. He is a graduate of Taylor University and has completed business programs at both Hong Kong Baptist University & Harvard Business School. Jeremy is also formally trained and certified in behavioral assessment, conflict management and life coaching. Jeremy, his wife Kim and their 4 kids reside in Kalamazoo. They love spending time exploring the outdoors, fixing up their farmhouse, and living life with friends and extended family.
Fun fact: Jeremy has been playing drums since he was 13 years old and made callbacks for the Blue Man Group.
Interested in more?
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