Financial self-care starts with saving money so it’s there when you need it. Many experts recommend saving 15 percent of your salary, which you can divide among different savings goals. The following six tips can help you save smarter and reduce your overall level of financial stress.

1.  Your first savings priority should be an emergency fund, with three to six months of living expenses stashed away in a separate online savings account. An online account provides ready access should you need it, and usually offers the best interest rate, too. Making it a separate account also means you’ll be less tempted to dip into it. Start small, even if it’s only $25 or $50 a month, and keep adding to it. Set mini-goals along the way. For example, your first goal might be to save $500—that’s often enough to avoid putting an unexpected expense on your credit card. If you get a large tax refund or bonus at work, consider contributing a big chunk of it to jumpstart your emergency fund.

2.  With health care costs continuing to rise, a Health Savings Account (HSA) provides a triple tax-advantaged benefit. An HSA requires you to have a high deductible health plan (HDHP). HDHPs offer lower monthly premiums but have higher out of pocket costs, and an HSA helps to offset these. The money you contribute to an HSA reduces your taxable income, grows tax-free, and withdrawals are tax-free too, provided you use them to pay for qualified health care expenses. These expenses can include medical insurance deductibles and co-pays, as well as vision care and dental expenses. Plus, the money you contribute to an HSA rolls over from year to year, and stays with you. So if you leave your current job, your HSA goes with you. Setting up an HSA now and building up contributions can be a good way to cover both current and future medical costs in retirement.

3.  Pay off any high-interest debt you have. If you are paying 17 percent or more on credit card debt, make a plan to pay it off. Start with the card with the highest rate first and pay as much as you can on it while still making minimum payments on your other cards. Once that card is  paid off, start paying off the card with the next highest interest rate, and continue doing this until all your debt is paid off. This task should get progressively easier as you pay down the cards because you’ll be saving money on interest, and you’ll have more money available for your other financial goals.

4.  Saving for retirement. If you work for an employer that offers a workplace plan, definitely take advantage of it, especially if your employer also makes a matching contribution. Why turn down free money? Typically, employer-sponsored plans like 401(k)s and 403(b)s have higher contribution limits, which means you can save more of your income and defer paying taxes on the portion you save through the retirement plan. The additional money your employer contributes can turbo-charge the growth of your savings. Here’s an example:

Let’s say you make $50,000 a year. Your company offers a match of $.50 on every $1 you contribute, up to 3 percent of your salary, which is a common matching percentage. If you were to contribute just 5 percent, or $2,500, over the course of a year, your company would add another $750 (1.5 percent of $50,000). Your total annual contribution would now add up to $3,250. At an annual compound growth rate of 7 percent, your savings could grow to more than $51,296 in ten years. The best part? To save $2,500 a year only takes $104 per pay period. Consider gradually increasing the percentage of salary you are saving until you’re consistently contributing 10% of your salary or maxing out your contribution limit.

If you want to have an additional source of income in retirement, you may also want to open a Roth IRA. Contributions to a Roth IRA are not tax deductible. However, your contributions and future withdrawals are tax-free. And unlike a traditional IRA, you can keep contributing to a Roth as long as you have earned income, which means your savings can continue to grow in retirement, without required distributions.

5.  Don’t forget to save for other financial goals. You can use a 529 plan to save for higher education expenses for yourself, your children or grandchildren. Qualified distributions from a 529 plan are tax-free. For shorter-term goals like a down payment for a house, you can use CD ladders. You’ll be able to earn a higher rate of interest while keeping your money safe. Many banks now offer a savings account with the option of sub-accounts that allow you to separate out goals, such as vacations or holiday spending. Once you’ve met one goal, such as holiday spending, you can focus on saving more toward your other goals. 

Ask a financial coach! Send your personal finance questions to Dr. Martha Menard via Massage Today at editor@massagetoday.com, and she may feature your question in an upcoming column.