Having some savings in the bank can always be useful, particularly if you end up falling on tough times. There can be many different reasons why you should put savings aside, as well as methods for doing so.
Savings are not just there to help you buy an elaborate or expensive item. They can also help to remove the pressure from a number of given scenarios.
One such example would be in the case of an accident when on the road. Something as simple as being rear-ended could leave you with injuries that prevent you from being able to work for a designated period of time. While you may be financially covered if you have taken out personal injury protection as part of your car insurance, this may not be the case otherwise. You could find a local personal injury lawyer in Philadelphia to speak to for more information on how to proceed but, in the meantime, you will still need to find a way to pay your bills and keep your household up and running without your regular income.
Another situation is if you are made redundant or your job is terminated for any other reason. You may get some form of severance pay, but this will not last forever. There is also no guarantee that you will find another role before that money runs out.
There may be other reasons that you find yourself in financial strains, such as your child needing new uniform, your car needing replacement or repairs, or a medical bill that was unexpected.
Due to this, and many other scenarios, it can be a good idea to have a backup cash pot in case of emergencies.
One such way of doing this would be to undertake a savings challenge. This involves putting aside a small amount each week, gradually increasing in amount, until you reach the end of the year and have a tidy sum in your pot. These amounts can be amended depending on your own personal cash situation.
Likewise, if you receive a pay rise at work, it can be a good idea to pretend like that did not occur. Instead, put that money into your savings account and continue to budget with your previous earnings. The extra money may not seem like a lot, but it can quickly increase over time, leaving you with an emergency fund that you do not miss.
Cutting back on expenses such as branded goods and buying new technology, cars, or clothes can also go a long way. By scrimping a little and getting rid of a ‘keeping up with the Jones’ attitude, you will find yourself still with good quality items, without having to pay over the odds for them, meaning more can be put away.
Saving money does not need to entail giving up on any form of enjoyment in life. It simply means making smarter money choices in the now to allow you a bit more security in the future.