Why saving is important? We save money because we can’t predict the future today. Especially after weathering the Great Recession a little less than 10-years ago, people are pragmatic with their money and want to ensure they have a cushion if something unforeseen happens.
One of the best ways to get started on saving a sum of money is by opening a savings account, which will contribute to even more savings through earned interest over time. Though interest rates aren’t exactly impressive right now, they are there, barely, and will help contribute to your wealth build out through your savings account.
Why Saving Money?
If you don’t have a savings account yet, that is perfectly fine. Here are a few reasons why now is the time to make a money-saving plan:
1. Emergency Funds
Again, we don’t have a crystal ball at our disposal. Whether something massive breaks in your home, you total your car, or you or a family member becomes ill, you are going to need substantial emergency funds to make sure you come out without debt in the future. We don’t like to think this way, which is why saving money doesn’t come naturally to us. Now is the perfect time to start saving your money in a savings account.
You probably plan to retire one day – everyone does. In order to retire, you need to have enough money saved up to cover your living expenses for the rest of your life. Depending on what type of job you held, it might be entirely up to you to fund life in retirement. If you start a savings account now, this reality will be much more likely for you down the line.
3. Down Payments
Maybe you’re just out of college and starting your new job. You probably hope to own your very own house one day. When it’s time to make that happen, you need to make a down payment on the house to show the lender you are serious about the purchase. If you start saving money for a down payment, you’ll be able to negotiate and bargain your way much farther through the process than if you had no money in your account.
Before home preparations come car preparations. Yes, car payments are available to you if you have no money to put towards the purchase of the car. But, if you’re able to buy the car in cash, you won’t have to worry about monthly payments that stretch your bank account thin. Another advantage of saving money ahead of purchasing a car: if you’re willing to pay in cash at the dealership, you can negotiate a much better price right then and there with the car salesmen.
It’s Never Too Late
Too many people assume if they’ve waited too long to save their money, there’s no point in starting now. They couldn’t be more wrong. By setting funds aside in a savings account, you’ll forget about that money, and leave it out of your disposable withdrawals.
Saving money adds up over time, and you’ll be thankful for whatever money you’re able to accumulate in the savings account.