If you just started making money on your own, you might be wondering why there is so much pressure to save money. If you have plenty of money to pay for the things you need, why should you put any aside and not spend it on things you enjoy? There are more than a few reasons to begin saving money, and every situation is unique. The best policy to begin with it to put aside just ten percent of your money every month. This allows you to retain plenty of spending money while building something behind the scenes to fall into should you fall off a financial cliff.
No one can predict an emergency, so it is important that you save what you can so you do not experience too much backlash should one occur. An emergency fund will cover sudden and unexpected expenses, such as a trip to the ER or a lifesaving surgery for your cat. Unexpected car repairs are always expensive and can add up to thousands lost.
Ideally, you should make sure to have anywhere between three and six months of expenses saved at all times. This will keep you afloat while you look for a new job, for example. If you have just started saving, forgo the ten percent rule and put at least a grand away to start. This will ensure your savings account has a nice bit of padding from the beginning.
As you begin the saving process, consider online apps for your smartphone and tablet, such as the B app. Such apps allow you to manage your money in a more productive way, allowing you to stretch it further and thus save more. You can even receive an AER percentage paid toward your credit balances.
These apps are especially helpful if you are planning for retirement. With the economy constantly shifting and the cost of living on the rise, it can feel difficult to put money aside. The sooner you start saving for retirement, the less you will have to save in the future. If you save enough, you can put your money to work for you. Over time, you will earn more and more interest as you add to your savings. Eventually, you should be contributing 10 to 15 percent of your gross income.
Vacation and Luxury Items
If you love to travel but never do because travel is expensive, a great saving regimen might open new doors for you. You can save for a year or two and finally get to go on that cruise to the Caribbean. Additionally, you could buy that large ticket item you always wanted but could never afford. The best part of savings is that it is money that is extra, meaning you do not miss out on your normal expenses by using some of it.
No matter your reason for starting your savings, you can only gain from doing so. Helpful apps exist to allow you better footing as you set out into the world, so do not disregard their benefits. The more you save and stretch your money, the more comfortable you will be.