The Benefits of Savings

The Benefits of Savings

 

Saving in a tough economy or when you’re living paycheck to paycheck seems like it would be extremely difficult. Now that the holidays are over and you don’t have to spend more on everyone else, it’s time to focus on you. Saving itself isn’t hard at all; it’s the discipline it takes to save that causes people to worry about the next health problem or the new windshield you might need. Millions of Americans are forced to live paycheck to paycheck but that’s at their own fault. It is possible to save. Even a person working minimum wage can have savings. After careful consideration, I have come up with a few tips and tricks to help you save without changing your lifestyle.

First of all, savings should be your first priority. Before bills and other non-necessities, make sure to transfer money into your savings. Savings can protect you from a bankruptcy! The leading cause of bankruptcy are medical bills and with a savings you have at least that to fall back on in case anything were to happen to you or to any of your family members.

Second, save as much or as little as you can. Even the change in your pocket can add up. Saving 50 cents a day can add up to $182 in a year. That is money that could have otherwise gone to McDonalds or to Sonic happy hour.

Third, have a savings account that requires at least 48 hours before you can have access to the money. This extra time forces you to think about big purchases before you regret them later. Do you really need that brand new Coach purse or is the one you have now doing just fine? Is a huge HDTV really necessary or can you see just fine from the old one in your living room?

Fourth, set a goal! Setting a goal can help you be more motivated. A $1,000 goal is a great start. One summer we had our AC break down during the extreme heat of August. We couldn’t use it at all, we were absolutely miserable. It cost us over a thousand dollars to fix. Because we didn’t have a savings we were forced to pay other bills late. From then on, we focused our efforts on building the $1,000 savings. It took about a year, but we did it and continue to keep it. It’s also a great idea to attach your savings to your checking account. Most banks offer complete overdraft protection that can save you hundreds of dollars in NSF fees. It gives you peace of mind and that is priceless!!

And, finally, never stop saving. Life throws out many curve balls and you must be prepared for the worst. Prepare yourself for your retirement as well. The bottom line is that you must always be ready for anything.

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