Wise Spend Wednesday is usually about spending. However, you still need money to spend, right? This week we focus on starting a savings account for those things in life that you either need, or like to splurge on!
How To Get An Account
Almost every bank out there offers a savings account, in addition to a standard checking account. You simply need to ask them for information on opening an account. Be prepared to have something to deposit in there first. Most banks require anywhere from $25 to $100 to open a savings account. Also be cautious on how much you keep in there. Some banks may charge a fee or penalty if your account balance dips below a certain amount. To build this up, it might be a good idea to have a few bucks out of each paycheck go directly into that account.
Benefits of Having a Savings Account
Obviously, having extra funds set aside is reassuring. Life changing events can happen. Here are a few reasons why you should have a savings account built:
- Job Loss. I cannot stress this enough of how much of a life saver it is by having a savings account when this happens. You should have enough money saved to cover at least 2-3 months worth of paychecks in the event that this happens. You may think "they'll never get rid of me, they need me too much." Lesson learned, tomorrow is never promised. The building could burn down. The company could be bought out. The business could close. They could simply do "reorganizing" and your position may be eliminated. Whatever the reasoning, it's always good to have a few months worth of income set aside.
- Car Troubles. I see this happen more times than it should. Brakes & rotors need to be replaced. The check engine light is on. Your tires are shot and you simply cannot go another mile on the ones you have now. Having a little bit set aside, you don't have to carry that burden of "how am I going to afford this?!"
- Kid Events. If you have school aged children, you know exactly what I'm talking about. You're walking out the door and all of a sudden they spring a last minute field trip or sporting event on you. Although it might not be a lot of cash, but you might have had that cash set aside for another bill or allocated to something else. Now, you're short on funds.
- Health & Medical Events. You fell doing yard work or your body simply gave out. Insurance covers a lot of this, but there's still going to be co-pays and out-of-pocket expenses. Having a savings account will help off-set some of those costs, and help you breathe easier knowing that there's not so much to cover.
- Higher Than Usual Utilities. Summer time rolls around and it's hotter out than usual. Thus, your air conditioning runs non-stop. You get the bill in the mail & it's $100 higher than it usually is. How the heck are you going to pay for that? A savings account, that's how.
- Vacation. It's been a while since you & the family, or just the spouse took a little vaca. But how are you going to pay for it? Most likely you will charge it to a credit card. Utilizing a savings account will help you pay off those credit card charges right away.
Whatever the case may be, rest assured that if you have a savings account, you have less to worry about. Watch for our weekly posts from CreditSoup.com!
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