You’re probably always being told about how you should save most of the money you make. But no-one ever explains why you should have a savings account and if there are any long-term perks to having one. That’s why we’ve put together some of the most important uses of a savings account for young professionals.
Saving for goals
Whether your goal is to get a new car, move out of home or travel abroad, you’re going to need to raise the money to achieve it and the earlier you start, the better. So, set up a short-term savings account (banks usually have different packages suited to various goals) and be on your way to making your dreams come true.
Everyone has emergencies
Things may be going pretty smoothly right now, but you don’t know when an unexpected illness, accident or family emergency may occur. As much as it sucks to think about this, you don’t want to be unprepared for it and possibly find yourself getting into debt because of it. Rather be safe than sorry and put aside a small amount every month in case of emergency.
Be in control
Planning your finances ahead and setting aside money each month puts you in control of your financial situation. Nothing beats the security of knowing that you’ve got money to take care of yourself or your family if anything were to happen. Putting a certain amount of money into your savings account every month also means you’re less likely to end up spending your entire salary or stipend on unnecessary or luxury items.
Use credit less
Saving your money can help you raise enough funds to afford things you would otherwise have needed to apply for credit to purchase. It can also reduce the monthly amount you need to pay for things like a car, house or any other items that require a deposit beforehand.
Make money work for you
Banks and other financial institutions offer different types of accounts, depending on why you’re saving money. If you’d like to open a mid to long-term savings plan, then you could speak to your bank about investing your money or putting it in an account that allows you to earn interest over a period of time. This means that your money can start making you money.
Managing your money is one of those really huge responsibilities that come with adulting. Although saving money can be difficult if you don’t earn a lot of money to begin with, it’s important to start small, draw up a budget and take control of your finances.