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The Importance of a Savings Account

Did you know that almost half of Americans have less than one thousand dollars in their savings account? Some have no savings at all! In an uncertain economy, saving money is more important than ever. It is important to store money away in case of an emergency, an unexpected cost, or even worse, the possibility of losing your job. Let’s discuss a few ways to boost your savings.

One way to maximize your savings account is to dedicate a certain percentage of each paycheck to be put away. It’s best to save as much as you possibly can, but if you need the money in each paycheck in your day to day life, even starting with 5% can be a good base. It’s advisable to build this over time; generally, putting 30% of each paycheck into savings is a smart ides. This requires sitting down and plotting out your expenses (rent, car payment, debt, etc.) each month and seeing what’s left over. And if you can’t put away a regular amount, starting with a lump sum ($100 or so) is a great place to begin. 

It’s also important to create a budget, and to keep track of how much you spend each month. Being conscious of where your money is spent can help you decide where to concentrate your purchases and where to cut your spending. By identifying problem points and making the necessary corrections, it’s easier to find money to save on a regular basis. Use a spreadsheet or computer-based template for ease and clarity, and to keep track of your accounts with regularity.

Finally, it’s best to put away any money you happen to stumble into. If you “find” money, or are given money as a gift, this is also smart to put away because it was never in your plan to begin with, and thus, the extra money has more value as a sort of insurance for your day to day life. Whether it’s a birthday gift, a stock dividend, or tips from working on the job, putting found money in your savings account is a great way to build on your base.

Finances can be very difficult to manage, especially on a tight budget. But with preparation and planning, you can grow your savings account to be there for you when you need it. Follow these tips and make smart financial decisions to help set your savings account up for success!