Kelly’s Financial Journey: Building a Safety Net and Planning for the Future
Kelly, a 29-year-old woman, was determined to improve her financial stability by tackling two important goals: building an emergency fund and saving for retirement. Though she had no savings in place yet, she wanted to create a solid plan to secure her financial future.
The Initial Concern
When Kelly first reached out to StepWise, she felt a bit uneasy. She knew how important it was to have an emergency fund, but she had yet to start one. On top of that, she wanted to save for retirement but didn’t have a clear idea of how much she needed or where to begin beyond her existing 401(k) contributions.
Kelly’s goals were ambitious—$30,000 for her emergency fund and enough saved for a comfortable retirement by age 60. But she was ready to commit $900 per month towards these goals, and she hoped her StepWise advisor could help her find the best way to manage her money.
The Conversation
As Kelly and her advisor began to talk, they broke down her goals into achievable steps. They started with her emergency fund. Kelly had no savings yet, so her first priority would be setting up a dedicated account and automating monthly contributions to gradually build her $30,000 fund.
Her advisor suggested that she celebrate milestones along the way to stay motivated, such as when she reaches $5,000 or $10,000.
Next, they focused on her retirement savings. Although Kelly didn’t know how much she needed, she was already contributing $212 per month to her 401(k), with her employer matching that amount. Her advisor reassured her that she was on the right track but encouraged her to use a retirement calculator to estimate a target goal. Additionally, they discussed opening an IRA as a way to supplement her retirement savings over time.
How Kelly Felt After the Conversation
By the end of the conversation, Kelly felt empowered. She now had a clear roadmap for building her emergency fund and boosting her retirement savings. With automated contributions in place and a plan to increase her savings as her income grows, Kelly felt confident she could achieve her financial goals while still enjoying her life today.
The Plan
Here’s the plan that Kelly and her advisor developed:
Emergency Fund: Save $30,000 for an emergency fund.
- Open a high-yield savings account dedicated to the emergency fund.
- Automate monthly contributions of $900.
- Review her budget regularly to ensure consistent savings.
- Celebrate milestones like reaching $5,000 or $10,000 to stay motivated.
Retirement Savings: Save for retirement by age 60.
- Continue contributing $212 monthly to her 401(k) and maximize employer matching.
- Use a retirement calculator to estimate how much she needs by retirement.
- Consider opening an IRA to supplement her 401(k).
- Increase contributions over time as her income grows.
- Review her retirement plan annually to stay on track.
Your Financial Journey
Are you ready to take control of your financial future like Kelly? Whether you're starting an emergency fund or planning for retirement, StepWise can help you create a personalized plan to reach your goals. Ready to get started?