Finances are one of the primary causes of stress worldwide – whether you’re worried about repaying debt or covering the costs of the upcoming holidays. However, while there are many ways you can work to better your financial situation, focusing on growing your savings account is one of the most beneficial.
Why is having savings necessary?
Having a separate savings account, or a ‘rainy-day’ fund set up, is beneficial in more ways than one. For example, it can:
- Protect you financially should you face an unprecedented emergency.
- Provide you with a sense of stability in an uncertain financial time.
- Help you plan for ‘big’ life purchases like cars and houses.
- Reduce financial woes and stress.
Despite this, a recent study found that “1 in 10 adults have no savings at all.”. While this may not seem like a significant issue, primarily if you’re comfortably covering your monthly expenses and bills, it could land you in a difficult situation should something go wrong.
With that in mind, here are three times you’ll be thankful you have savings in place.
1. When your car breaks down.
Whether heading out on a road trip or driving to and from work, your car is likely your lifeline. As a result, many drivers are incredibly put-out when their vehicle decides to break down on the roadside. With the average car repair costing anywhere from $300-$500, you must have some savings to rely on so that you aren’t expected to get this money together out of nowhere. This way, you can repair your car as soon as possible instead of relying on lifts, taxis, or public transport for months.
2. When you need legal help
A flourishing savings account can also come in handy should you require legal support or assistance. For example, your savings can help you cover the cost of expert legal representation, such as a lawyer or paralegal from Sitkoff & Hanrahan, LLP. Not only will this reduce the strain placed on your bank account, but it will also put you in the best possible position when entering the court system or making a plea.
3. When your pipes spring a leak.
Leaky pipes are more than just an annoyance, and while you may be able to resolve some of these issues yourself, it’s also essential you have some money set aside to carry out any major home repairs. For example, if your pipe leaks, this could cause significant damage to your home and, in some cases, even lead to flooding and structural damage. As a result, you’ll be thankful to have savings in place when these issues arise.
Start saving today!
The sooner you start saving, the better, which means you are prepared for any scenario you find yourself in. However, “most financial experts suggest you need a cash stash equal to six months of expenses.” Once you’ve reached this stage, consider looking at other ways to better your financial position, such as investing (while also adding to your savings as much as possible).