Savings Account Value, PUSH Magazine, Volume 3, Issue 6

Possessing money is essential to our well-being, as everyone needs money. Whether having money to provide essentials or the freedom to experience life as we wish… Money rules the Earth. Those who are financially savvy have money and work toward financial goals to save money and use several methods.

Efficiently saving money takes strategy and often a solid idea of what savings will be used toward what goals. Some savings are used for emergencies only, such as car or home repairs. Others are specifically for building a down payment on a home or college. Some are general “rainy day” funds. The list below includes essential information when planning for savings accounts and the importance of why they extend beyond an emergency fund.

Simply put, a savings account is a secure bank ac- count that allows you to deposit your money while usually earning interest. Everyone views a savings account differently. Some feel that a savings account is only for saving for a rainy day and being prepared with emergency funds. While others believe savings accounts are the location to store most of your cash, even for general expenses.

Savings accounts do not need to focus only on long-term returns or emergencies. Savings accounts provide individuals with a safe place to keep money required for purchases in the short term and supply future goals.

The major difference between an emergency fund and a savings account is what you plan to use it for. Your savings account is for cash you may plan for an intended purpose. It can be a place to deposit or transfer money over the long term as you build toward a specific goal or purchase. Or, you can use a savings account to keep the cash you have already saved for immediate expenses or planned investments. When building a savings account with an emergency fund in mind, that effort includes a cash reserve you maintain for unforeseen expenses that could not be handled with your regular monthly deposits. These may consist of loss of job, medical bills, or, consequently, loss of income. Think of it this way, a savings account is what you plan and intend it to be for. An emergency fund is for the unexpected.

There is no universal answer to how much money everyone should have in their savings account. This personal decision should be based on your sole needs and situation. There is no set standard amount of money to keep in your savings account. Instead of an amount, focus on what you plan to save for. So, decide on a plan for how much you wish to sock away and maintain a pattern. Consistency will create success in achieving your financial goals.

Everyone’s savings account balance is different and will vary, but the total amount in an individual’s emergency fund should not. The general rule of thumb is to prepare for 3 to 6 months of expenses in a secure account.

This amount should also differ from your savings account as your savings account should be separate from your emergency fund. When withdrawing cash from your savings account may be part of your savings account plan, but when building your emergency fund, it should remain off-limits.

Look at it this way; an emergency fund will keep you afloat for the time you have prepared for while you look for another source of income. However, your emergency fund should be a different beginning and end of your savings.

Several reasons someone may want or need to use their emergency funds include job loss, medical and dental expenses, pet care, car repairs, broken appliances, and repair to their home. However, remember that these funds should only be used during a necessary emergency. Your emergency fund should not be used to help fund a vacation, new clothes, or other unnecessary expenses.

These ideas are great in theory, but they do not get you anywhere if you cannot save money. Having all the information only matters if you can apply the knowledge. So, the best way to get started is to track your spending.

We hear it all the time, and it can be annoying, but when you track your spending, you end up feeling much better about what you can afford and how much you can afford to save. Outlining your expenses paints a picture of where you can make some cuts. Do you need to pay for five streaming sites? Transferring money from your checking account to your savings account on a regular system is a must; no amount is too small to start.