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Saving money is something we all hope to do, and there are many reasons why setting up a savings account is a good idea. Anyone who has been short of ready cash will realise the difficulties that can result, such as a credit card debt spiral, inability to pay fees or fines on time, penalty payments and ongoing money worries. Of course, getting started with a savings plan is the hardest part, but even a little saved weekly or even monthly will shield you from life’s unwanted surprises.
Setting a comfortable savings target is the first step. Not only will there be money aside in case of emergency, you will also feel increased satisfaction and confidence due to your disciplined savings efforts. Whether you are single or part of a family, a better and more consistent future is guaranteed when savings are available for emergency use.
Reasons for Saving
In today’s modern economy many employment sectors don’t provide traditional health and retirement savings plans. In /this environment we are forced to live from one pay-day to the next without any real guarantees. Having money in the bank will provide peace of mind and the ability to ride out any down times during your career or between jobs.
A savings account doesn’t only have to be geared toward emergencies either, although some money should be set aside for unexpected reversals in life. Your savings account can be further divided into additional priorities and future plans such as a vacation or even a home deposit.
We are all conditioned to paying bills and living expenses, so why not treat yourself as another essential expense and dedicate some of your wage toward savings. Be patient while your balance rises and you will begin to appreciate there is a lot more to working than just paying the bills.
The first step is to visit your preferred bank or financial institution and set up an account. Be clear with the bank that it’s a simple savings account you want. Features of the account to look for include minimal (or zero) monthly account keeping fees, no minimum balance, and the best possible interest rate. You can even link your savings account with other accounts you may have for convenient (or automatic) transferring of funds.
Your visit to the bank shouldn’t take up much of your time, and you will be up and running with a savings plan.
Growing Your Savings
At this point it’s no use getting too far ahead of yourself. Don’t start to plan for amazing vacations or fancy cars at this point. The first and most important consideration of a savings account is to have ready cash available for emergency use. Financial experts suggest keeping at least 3 to 6 months of emergency expense savings set aside. It will take some time to build up this large chunk of cash, but once it’s done you (and your family) will be able to breathe easy knowing that unexpected financial hurdles can be overcome. Try to focus on one savings goal at a time to avoid impatience or discouragement.
If possible, have around 10 percent of your salary directly deposited into your account. It will be much easier to resist temptation this way, and you will become habituated to understanding that the 10 percent is not for immediate use. In time you won’t even think about it, and your savings account will continue to rise. In any case, whatever percentage is suitable for your individual circumstances, even 5 percent, will add up over time.
Stay on course and don’t give up
Nothing is achieved in life by being fickle or undisciplined. Why should your savings plan be any different? Keep on track with your plan and you will ultimately find yourself being encouraged by the savings. Try to see your savings account as a long-distance race rather than a sprint. You will eventually see a sizable balance in your savings account, and even have the opportunity to dedicate a little toward luxuries for yourself and your family.
For the sake of minor frugal living adjustments, such as fewer shop-bought coffees or meals per week, your growing savings will ensure you have a financial cushion, peace of mind, and the added confidence that, for better or worse, only money can buy.