It’s age-old advice passed down from our grandparents to our parents and then on to us. Building a savings account is something we hear in every personal finance seminar and class. Even though we know it’s something that we should do, getting savings together often never makes it to the top of our list of financial priorities. Perhaps it would be easier to get our savings accounts added to our “To-Do’s” if we knew just how much that emergency savings account can positively impact our personal well-being.
If you are having difficulty seeing how much you are giving up by not building and maintaining a savings account, here is a list of 5 ways savings can benefit you:
Change How You See Pay Day
A country famous for its excess, in the last 50 years we have become used to living from one paycheck to the next; spending our money just as fast as we earn it. Getting into a financial bind monthly, or sometimes weekly, puts a lot of strain on us as the bills roll in. With the convenience of credit cards and other lines of credit, having a savings account to help keep us afloat between paychecks may not seem like a big deal, but you’d be surprised at how freeing it is to not worry about when your next check hits the bank.
Build Your Financial Self-Confidence
Setting and meeting your savings goals will bolster your self-confidence and help to prepare you to handle future financial hurdles with a level head. Unsure of how you’re going to handle paying down student loans, walk away from credit cards and stop the habit of taking cash advances? Building savings is the first step to meeting any of a variety of financial goals, and the closer your bank account gets to meeting your next savings goal the more you’ll feel like you can accomplish anything that comes up.
Remove the Stress of Repairs
It always seems like the car breaks down, the heater goes out or one of the kids comes home wanting to enroll in a new activity the day after we spend our last $20. Building a hefty savings account not only keeps you from the stress of making it to your next paycheck, but it will also keep you from having to make a choice between a new alternator and a trip to the grocery store.
Affording the Finer Things
Did you know that having savings stashed away can help you to get a bigger mortgage, a better interest rate on a car loan and negotiate better prices on other high-ticket items? Well, it’s true. Not only does a savings account give you the ability to put a hefty down-payment down on major purchases, but it also gives you the bargaining power you need to get the best prices possible and helps you to have liquid collateral to borrow against.
Increase Your Ability to Help Others
Building a savings account isn’t just good for you, but it can put you in a position to help others as well. Having the ability to help out a family member going through hard times, have enough money set aside to donate to kid’s school fundraisers and purchase gifts for birthdays and the holidays will help to make you feel good about giving to others. Being able to shop for, give to and help others without the stress of worrying about where the money’s coming from will allow you to enjoy the full rewards of helping others.
There are dozens of other ways that having a savings account will help you to move forward in life with pride and self-assurance. The most important thing to know about starting a savings account is to simply get started. Whether you’re able to save $5 a month or $500, as you watch your savings grow you will soon realize the many financial opportunities and freedoms that having funds set aside will allow you to enjoy.