How much do you have saved so far? Statistics show that the average American has a savings rate of 7.9%. So where do you fall? Maybe it is time for you to open an account at your local personal savings bank in Indiana. The perks of saving money are worth considering. Here are a few to motivate you to get started:
1. It helps you deal with emergencies
Life is unpredictable. That means there are times when unexpected expenses will come up, and you have to deal with them. It could be an unscheduled car repair or medical bills. When these expenses come up, you have no choice but to pay for them.
What happens when you have a global catastrophe similar to the current coronavirus pandemic? What happens when others are not in a position to lend you money? Research shows that only 41% of Americans can cover an emergency worth $1,000 using their savings. The rest would have to borrow that money from somewhere else. That is where your savings come in.
Having savings enables you to deal with emergencies. It ensures that you can pay off unexpected bills even when other people cannot.
2. It helps cushion you against a job loss
Losing a job is never easy. And it can disrupt your life significantly. You probably rely on that job to pay your regular bills, including your mortgage. It might also be responsible for catering for your children’s education. So if you lose it, would you be able to survive until you can stand back up on your feet again?
Savings helps you maintain dignity even after your job is gone. It allows you to have the freedom you need to find a replacement job with a clear mind. Because you will be able to meet all your bills, you will not take the first job that comes along because you are financially desperate. Our partner and children do not have to move suddenly to a new place. And that allows you to negotiate for good work terms from a position of strength.
3. It helps you finance your dreams
A mortgage is a loan that you take on the home that you want to leave in. But in many cases, being able to qualify for a mortgage requires you to find a down payment. Without that down payment, the home of your dreams might go to someone else.
To be able to get a mortgage on good terms, you would need to dip into your savings to pay for the required deposit. So your savings essentially helps you to finance your big dreams. If you have savings, you can finance other projects that you have always wanted to do. These include enjoying a vacation and traveling around the world.
You can also have a fantasy wedding that you have always wanted. Having enough savings will also make it easier for you to spend more time with your child after birth.
4. It helps you avoid debt
There are expenses that you must meet every month. That money has to come from somewhere. If you don’t have the finances, then you have to borrow and get into debt. Over time, your debt can spiral and become unmanageable. You could end up stressed out and even bankrupt. Your personal property can get auctioned to recover that money.
However, if you have savings, you can continue to pay for your regular expenses. And you can even pay for emergencies that you did not plan for. That allows you to have financial freedom because you don’t need to get into debt.
It is an excellent idea to develop a savings culture. The more you save, the better cushioned you will be in case of financial emergencies. You will also be able to achieve big goals better.