What Should You Be Saving For?

By: Michael Millington

When it comes to saving, the fear that accompanies most individuals is the reason to do so. It can be tempting to spend whatever money you don’t use for bills and debt on whatever you want. However, saving money can be beneficial for the immediate future as well as in the long term. On the other hand, having a savings account without a reason to save can make saving feel like a waste of time. There are plenty of reasons to make saving a priority. Here are a few things to consider before you close your savings account for good.

 

In Case of Emergency

The main reason to save money is to make sure you have a financial cushion should anything negative happen to you. Most people adopt the mentality of being immune to hardship by ruling out the possibility of anything bad happening to them. Regardless of the likelihood of bad things happening, being prepared for these things can help you in a pinch. Having extra money to use in a time of crisis can act as a blessing when you cannot use your normal income.

As a rule of thumb, having six months of expenses saved up can help to alleviate the financial blow should you lose your job. Having this money set aside can help to remove the stress of wondering how your bills will be paid. This can free you up to focus on more important things, like looking for a new form of employment. The more you save up, the bigger the cushion you create. You might even be able to borrow from your savings (as a cash loan) and pay it back over time to replenish your savings while improving on your credit score.

Aside from losing your job, another reason you might be glad you have an emergency fund is if you get injured or fall sick. While being stuck in a hospital bed can also hinder your ability to make money, it comes at a cost. Having health insurance can help to lessen the weight of medical bills piling up. While an emergency savings account might not be able to completely pay off any medical debt, any amount it can pay can help to safeguard your future income and minimize your debt payments going forward.

 

In Case of a Big Event

There are many things that require planning (and a lot of money) to pull off. Going on vacation, planning a wedding, preparing for a funeral, remodeling your home, or preparing for a baby could all be reasons to have a well-stocked savings account. The key to accurately saving for any major event is to properly plan and incorporate the event into your monthly budget. Being disciplined enough to stick to your budget when planning an event will prove beneficial when the event rolls around.

The only event you may have trouble planning is a funeral. Knowing that a loved one is on the verge of passing can be a tragic feeling. However, no one can truly tell when that time will come. The best way to financially prepare is to anticipate the worst. The best case scenario will see you prepared for an event that has yet to come to pass. The worst case scenario will still see you prepared and will lessen the financial strain of the situation.

Saving for something more light hearted (like a vacation) may require a bit more personal discipline than anything else. While a vacation is a big financial undertaking, since it might not always be seen as a necessary expense it can end up being neglected once started. Setting strict saving rules for events can help to keep yourself on track. If you have a date for your vacation, budget in how much it costs and break it up into monthly portions. This way, you’ll have a good indicator of how much you should be saving and whether you need to scale back or add more to your vacation fund.

 

For Future Planning

Planning for the future requires more than thoughts and dreams. It requires dedication, planning and funding. There are many things that we plan for but have no way of paying for. Things like our children’s education, retirement, or home owning. The main issue with saving for these things is not knowing whether you want to save for these things at all. There are a few good reasons to save for the future, even if you’re not entirely certain that you want to.

Firstly, having the savings account will be beneficial regardless of what you use it for. Even if you start the account with a particular goal in mind, the goal can change but the habit of saving must remain the same. With the motivation in place, you can continue to save money and decide on what to use it for after you are sure of what you want to focus on. Having a focus can help to keep your saving behavior a regular occurrence, but once you’ve been saving enough a specific focus might not always be necessary.

Secondly, having assets to pass down can be helpful to your kids. Many people may have a hard enough time trying to make a living in the world without help. Having a savings account set up for your child is a good way to get them started in the world. With proper financial training, you can help to create a strong foundation for your kids once they reach adulthood. While there will always be worries that come with the transition to adulthood, at least you can make sure finances are not one of them.

 

There are many great reasons to have a savings account and to start a savings mentality. One of the main reasons that many Americans fail to do so is because of the debt they may carry around with them. Having massive amounts of unsecured debt can hinder anyone’s ability to save effectively. If you suffer from credit card bills, medical debt or personal loan troubles, Guardian Debt Relief can help. Our debt relief specialists have been trained to find settlement solutions for your debt related issues. Give our experts a call and take advantage of our free consultation. Take the first step towards a saving mentality and contact Guardian Debt Relief today.