Far too many people live paycheck-to-paycheck without putting any money into savings. There is always a movie and dinner, a new electronic gadget, or the latest fashion trend. Young adults are especially guilty of neglecting their savings accounts because they don’t believe they can afford to save.
Build A Short-Term Savings Account
Depositing only $10 per week will put $520 in a savings account in a year, and most can afford to save much more than that. Dinner, a movie, popcorn, and drinks for two people can easily cost over $50. Some people eat out once a week and spend $50 or more. These same people could cut back some of their spending and put the savings in the bank. Short-term saving is essential because it pays the unexpected repair that may be needed for your car, furnace, water heater, or the library book your child doused in chocolate pudding. Your short-term savings is there to cover the unexpected.
Build A Long Term Savings Account
Do you really need two savings accounts? The answer is yes. A long-term savings account is essential. This purpose of this account is to save for a down payment on a home, continuing education, a new car, or even a boat. When you have a healthy down payment to put down on any of these items, you will lower you monthly payment obligation. The best way to build this account up quickly is to commit to a dollar amount, such as $150 a month or 10-percent of your take home pay. If both partners in a marriage are working, they can each commit to a weekly or monthly amount for the long-term savings.
What can give you better peace of mind than knowing you are saving for your future and have savings set aside for emergency needs? Worrying about finances causes stress, headaches, illness, and marriage breakups. Make your savings account the first bill you pay each month, and don’t touch it until you are ready to use it for its intended purpose. You will be amazed how quickly your savings grows and how rapidly you will build your own security.
When you save regularly and watch your account balance grow, you will realize your own worth and potential. You can be confident in your ability to manage your money in a way that denotes success. There is a certain power that comes with learning to control spending and save money. You soon learn you can gradually add to your belongings without going into debt.
Build For Retirement
Once you purchased your dream home, keep adding to the long-term savings account. Someday you will retire, and you cannot survive on Social Security. You can’t afford to run out of money before you die. You may be able to pick up some part-time work, but is that how you want to spend your retirement? If you are fortunate to have a 401K, or other retirement benefits, and a good amount of savings, you will make it through your retirement without the need of part-time jobs.
A savings account makes life easier. It looks good on your credit, and it is there if an emergency arises. Make the commitment to open a savings account and make regular deposits. It will change your life.