Even when there’s an endless list of compelling reasons as to why everyone should have a savings account of some kind, many people still end up spending their leftover money instead of saving it. Or they leave it in their current bank account, simply lying dormant and not earning any interest. You can’t blame them. In today’s uncertain economy, it’s difficult to simply lock your money away when you risk needing it.
A common misconception is that every savings account has a fixed term for which you cannot withdraw your money. However, this isn’t true and there are a variety of savings accounts which you can deposit into and withdraw from to your heart’s content. You can withdraw the interest each month and add it to your paycheck, or simply let it compound and grow.
Here’s why you should open one up today.
Paying For Your Children’s Education
College is frighteningly expensive and will likely be the most amount of money you’ll ever spend on one thing for your kids. According to a study done by the Associated Press, many parents are still paying off their own student loans while sending their kids to college. On average, college graduates walk out of school with around $35,000 in student loan debt.
If you start saving when your kids are still young, you could essentially have them attend college loan-free depending on how much you save. This could spare you serious headaches in the future.
You’ll Be Better Prepared For Unexpected Expenses
You can consider a savings account as a form of insurance when it comes to paying off unexpected expenses such as vehicle repairs, medical emergencies and increases in monthly bills. The great thing about this insurance is that it’s readily available for you to withdraw and every cent you put in is guaranteed to grow or return into your wallet at the very least.
By not having any sort of savings account, you’re treading deep waters and will inevitably drown in some sort of debt because life happens no matter how frugal you are. You can’t fully determine what will happen in the future, so it’s better to be prepared.
Save For Something Nice
While being prepared for more essential expenses such as those mentioned above should be your first priority; it’s also advisable to have a savings account for life’s luxuries. Perhaps there’s a $200 pair of shoes that you really like, but if you buy them now, there won’t be enough in your bank account for your usual week’s lunch.
If you simply deposit $50 per month into a savings account, you’ll have enough for those shoes in no time. This applies to essentially anything. Simply do the calculations and see just how far your money can go if you split it up and save it.
Take a moment to sit down and look at where your money goes every month. Perhaps there are cheaper alternatives to some of the things you often purchase. Put that money you’re saving aside, let it grow, and you’ll feel a million times more financially secure while also being more prepared for life’s unexpected events.