Do you often wonder why you should have a savings account? There are a lot of benefits of this type of account and every penny put aside will add up and the end of the year you can buy something you really wanted but couldn’t afford or maybe you will invest your money for return.
Funds in your savings account are readily accessible. You can make withdrawals from your savings account during regular business hours. Some banks may offer additional accessibility with an ATM card.
Regardless of a family’s income, there is always the possibility that a wage earner could become ill, injured or unemployed. There is also a persistent possibility of an unexpected expense, such as vehicle or appliance repairs, dental work, or travel.
Big Ticket Items
You might not have the resources to make a major purchase on the spur of the moment. By setting aside a fixed amount of money in a savings account each month toward the price of a big-ticket item, you will have the funds available to pay cash and avoid going into debt.
Life happens. You might have a tire blow out, or you might blow the engine in your car. Your sister might go into premature labor and you need to fly to Denver tonight. Unexpected expenses can put a huge damper on your financial plan; money set aside in a savings account can cover them.
Discourages Reckless Spending and Encourages Financial Stability
It is easier to spend money that is in your pocket than to spend money that you have to get from the bank or the ATM. This “out of sight, out of mind” scenario may help discourage impulse buying.
Sets a Good Example for the Kids
Putting money into a savings account at your local bank provides you with a teachable moment with your kids. Showing your kids how to save gives them an opportunity to learn self-control. Studies suggest that children who have savings accounts have less stress, a greater sense of hope and are more likely to attend college than kids who don’t, according to the American Bankers Association.
Encourages Sound Financial Habits
If you’re not in the habit of saving, start small and make it a habit. Then, increase the amount you’re saving incrementally, experts say. Briboneria tells her clients to “pull off the Band-Aid and start somewhere.” First, set a goal for how much you want to accumulate. Then, set a time frame for when you want it completed.
Savings accounts pay interest on your deposits. Granted, the interest on savings accounts is minimal, but it is better than putting cash under your mattress where it earns nothing at all.
A few bucks here and there will make the difference. Lets start saving money today!