5 Benefits of Savings Accounts
If used correctly, a savings account can be the bedrock to your finances. Not only can a savings account help you achieve your financial goals, but it can also prepare you for sudden changes in life. If you’re not already using a savings account to prepare for your future, these are 5 reasons you might want to consider doing so.
Having a Safety Net
The chances are good that you already know how unexpected life can be. Automobile repairs, job loss, or even a natural disaster can strike at the most inconvenient of times. A savings account is a great back up resource for covering sudden expenses on an unfortunate, rainy day. With a savings account, it’s easier to handle the multitude of things that life might throw at you.
Planning for the Future
Many people utilize their savings accounts as retirement strategies. In the event that you retire or even lose your job, you’ll need an ample amount of money to help you survive for an indefinite amount of time. A savings account can help prepare you for times in life when you’re unable to work.
Division of Funds
In some cases, people will attempt to keep their saved funds in their checking accounts along with funds that are ideally reserved for spending and paying bills. While there’s nothing technically wrong with this strategy, it can still lead to accidental spending of the saved funds. A savings account ensures that you have multiple accounts for delegating your finances.
Potential for Interest
Certain types of savings accounts accrue interest, meaning your account balance could earn money over time. Attempt to find a savings account offer that isn’t coupled with ridiculous fees, but also offers a decent APY (annual percentage yield). Besides, who wouldn’t want to earn money for doing absolutely nothing?
Peace of Mind
Lastly, a savings account can help you gain peace of mind about your finances. In the event that your vehicle breaks down or your home needs an emergency renovation, how will you fund the repairs without burning up your credit or using your bill/grocery money? With a savings account, you can remain confident that you can handle just about any emergency that life could possibly hurl your way.