A significant portion of people in our country and even the world don’t have any money saved for emergencies and other unexpected costs. That is an alarming number and something that can also mean financial strain and difficulty for individuals and families. One of the best ways that we can level up financially is to start building up our savings. It’s not always easy, but if we start to build up a financial buffer, we can take a lot of stress and uncertainty off our plates.
The thing about life is that we can’t predict what’s coming in the future, and that often means costs and expenses we never planned for. While these things are annoying, they are inevitable and instead of denying that they’ll happen, the best way to handle them is to have some extra cash in the bank. What are some of the challenges having savings can help us navigate without it ruining us financially? In this guide, we discuss how to make life easier by adding more money to your savings account and why.
When you’re a homeowner, your house is totally your responsibility and even though we like to think our house will always be in the best condition, sometimes unplanned home maintenance and fixing costs will come up out of the blue, and if you don’t have a financial buffer that can be catastrophic. For example, if your home develops a plumbing issue like a leak, a blockage or a hot water supply issue, this is a cost that needs to be taken care of quickly. According to Fix It Right Plumbing, “any plumbing issue has to be addressed immediately before it causes significant damage to your home.” This is a cost that can’t be put off, so the best thing we can do is dip into our savings account so we can prevent a bigger problem. Learn more about the importance of taking care of plumbing issues quickly and what these people do here at Fix It Right Plumbing.
One of the most annoying things about driving and owning a car is the risk of issues and problems. Even if we’re careful drivers and maintain our cars well, anything can happen on the road. Our tires can get damaged by something in the road, our cars can get scratched or dented, and windows can get broken. When this happens and insurance can’t cover it, we can use our savings to get the issue sorted out without it affecting the expenses we already have.
Loss of Job
In 2020 many people experienced a sudden loss or reduction of income when businesses were shut down. This is a highly distressing situation that can impact just about every area of our lives. What makes this worse is if you’re already living paycheck to paycheck, losing your earnings means you have nothing to keep you going until you’ve figured out your next move. Having some money in savings can be helpful in this case. It gives us access to emergency money and a way to pay our bills right now which can alleviate stress in a challenging time.
Savings aren’t just for bad situations, having a financial buffer can allow us to take advantage of financial opportunities that unexpectedly come our way. If you were to come across an investment opportunity that required a bit of cash immediately, all you would have to do is dip into your savings account and leverage that money to bring you closer to your financial goals. Whether it’s buying stock or getting involved in a group investment endeavor, when we already have cash, we’ve solved a huge part of the problem most people face when they have a financial opportunity in front of them.
We talk a lot about ways to earn extra money and opportunities to build our wealth, but it’s important that we don’t forget to build a solid foundation for all those activities to be worth it. Part of that foundation is having a financial buffer that serves as an emergency fund that we can make use of when we need it. It’s the most powerful way to make sure every bit of financial progress we make is not eroded by a financial emergency. It’s also good because that emergency will feel more like a minor nuisance, not a major setback that will set us off our financial path for months. And the bonus is, in the case that an emergency or use for that money never arises, you can use some of it to treat yourself!