If you often live paycheck to paycheck, it may seem impossible to start a savings account. However, it's always a good move to start saving, even if it's just a small amount at a time. It's easy to sign up for a savings account, and if you're disciplined and make saving a habit, your account will build over time. Here are four reasons to start a savings account as soon as you can, whether you struggle with your budget or have plenty of extra money.
1. You May Need A House Down Payment Some Day
If buying a house is in your future, you need to start preparing for it now by saving for the down payment. Houses can be expensive in certain markets, so even a 10 percent down payment could be a significant amount of money that takes years to save. The sooner you start, the sooner you'll have the money you need to buy your first home.
2. You Might Lose Your Job And Need Your Savings
In uncertain times, it's more important than ever to have money put back into a savings account. If you lose your job, you can use your savings to keep your family fed. Ideally, you'll have enough money saved to last for several months, but anything is better than nothing at all so you can make it until you get another job.
3. You Can Avoid Debt And Payday Loans
If you have an emergency and need money right away to fix your car, pay to get lights turned back on, or pay for an emergency dentist, you may need to turn to a payday loan or try to take on debt through a personal loan or credit card. If your finances are tight, the last thing you need is to add debt to the picture.
If you have a savings account with several hundred or a few thousand dollars in it, you can have peace of mind you'll have funds for an emergency without having to borrow or pester your family for money.
4. You Can Take Vacations Or Buy Things
While you probably don't want to empty your savings to go on a vacation, you could start a separate savings account for taking a trip or buying things you want for your home. If you budget your money and save toward a fun trip, you may find it easier to have the money to go. Otherwise, it may seem like all your money goes toward bills and there's nothing left for a vacation or to buy new flooring or a new refrigerator.
You probably won't miss taking out a small amount of money every payday, and if you make a habit of putting money in savings a couple of times each month, or every week, the money will grow. That can motivate you to rework your budget so you can save even more.
Saving money should be a lifelong habit so you can be self-sufficient and give your family the things they need and want. You can sign up for a savings account with a small deposit and watch your savings grow over time.
For more information, contact a local bank or credit union, like Bellco Credit Union.