The following article is provided by John Frainee, personal finance blogger for The Christian Dollar

How many times have you been told to save toward retirement? A million times, right? That’s because it’s important to start as soon as possible! Need I go over how compound interest works?

Other Life Goals You Should Save Toward

Retirement, however, shouldn’t be the only life goal you save toward. In fact, there are several milestones in life at which you will need to crack open your wallet – big time. Consider the following life-changing goals:

College – You don’t necessarily need student loans to get an education. By working hard (really hard, actually) for a few years before you start school you can save up enough money to cash flow your way to a diploma.

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Marriage – Weddings and rings. Those two simple words often represent thousands of dollars. If you hear wedding bells in your near future, save up your money and avoid financing!

Children – Being financially ready to have children is impossible. At least, that’s what every parent I’ve met has told me regarding having children. According to, parents can count on spending close to $50 per week ($2,448 per year) on diapers, formula and baby food alone. Then, add that to new furniture, equipment, clothes, daycare, and medical expenses and you have one expensive little tot. If you’re expecting a child, focus on saving your money until you get the hang of your new financial plan. Read more about planning for children.

Home Ownership – Ah, the American dream. Don’t turn it into an American nightmare! Save for a hearty downpayment or (if you’re up to the challenge) pay cash for your dream house. It has been done!

The Importance of Giving Toward Life Goals

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So why is it so important to save toward your life goals? Isn’t easier to just take them as they come? After all, you really don’t know what the future holds! This kind of attitude can get you into trouble – big time.

When you don’t save for the future, you’re depending on credit instead of money in the bank when an emergency happens or a major life event sneaks up on you. That’s dangerous for a couple of reasons:

You will be paying interest on borrowed money, limiting your financial power – Pretend every dollar you owned was only worth 90 cents, or 85 cents, or 80 cents – that’s essentially what you’re doing to yourself when you borrow money (depending on the interest rate).

You will lose the opportunity to invest your money – Borrowing money is the arch-enemy of investing. Investing gives you a return on your money while borrowing gives you a negative return on your money. So not only are you paying interest when you’re borrowing, you’re losing all the potential gains you could have earned had you invested those dollars. Ouch.

By the way, you don’t need a credit card to get cash back rewards with a MasterCard. You can spend responsibly and earn perks without going into debt.

How to Give Toward Life Goals

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Save Money in Tax Advantaged Accounts – If you’re saving for retirement, consider putting as much money as possible into a Roth IRA. You’ll pay taxes on the money you put in, but you won’t pay money on your gains when you withdraw at retirement. This gives you a huge tax advantage.

If you’re saving for college, consider an Education Savings Account or a 529 plan. See what is available in your state!

Invest Money for Long Term Goals – If you are saving money for a life goal that is several years away, go ahead and invest the money. You’ll make a decent return on your investment (much more than a CD or High-Yield Savings Account) and will have ample time to pull your funds out of the market.

If you are saving money for a life goal that is on the horizon, you might want to save that money in a High-Yield Savings Account if you can’t afford to lose the money in investments.

Life is, well, complicated. The good news is that Betterment makes it easy for people to invest their money (so they’re more likely to do so)!

Don’t be caught empty-handed when it’s time to walk down the aisle, help your child study aeronautics, purchase the little yellow house with a white picket fence or retire with dignity.