Saving for the future is difficult, with temptations and expenses lurking around every corner. It’s more important to save now than ever before, as life expectancy increases, education costs rise and Social Security becomes less of a certain thing.
Be prepared for emergencies
Life takes some odd turns that can be quite expensive. Building an emergency fund, ideally at least nine months to a year of income, eases the stress of these unexpected events.
This fund covers genuine emergencies, such as job loss or major health challenges, as well as more common issues, such as broken appliances, a leaky roof or braces for your child. Some experts actually recommend creating two separate savings accounts in this area: one for true emergencies and another to cover maintenance and repair issues.
Saving regularly means you can say yes more often to life’s little luxuries, whether that means an island getaway, a new car, a home remodel or a smart TV. When opportunities arise, you’ll be able to pay with a calculated portion of your savings rather than having to borrow or simply go without.
Take the worry out of education expense
A savings plan can mean the difference between comfortably paying for higher education and becoming burdened with debt. Representatives of financial institutions like AbbyBank can help you figure out a savings strategy and open the right accounts. This is a win-win, since a good education is a ticket to higher earnings, which in turn boosts your ability to save.
Own a home
If you dream of owning your own home, saving can help turn that aspiration into reality. Even if you’ve seen mortgage financing offered with “no money down,” the truth is, the bigger your down payment, the better your negotiating position, interest rate costs and ultimately your buying power. You’ll likely qualify for a bigger home with lower monthly payments than you would have if you hadn’t accumulated a significant amount to put toward a home.
Retire in style
Unless you’ve been saving consistently, it will be hard to live comfortably in retirement. The sooner you start building your retirement fund, the better your chances to have enough cash to travel, take classes, and enjoy this time of freedom any way you choose.
Maximize your savings potential
Even if you don’t have much to put away right now, saving even small amounts consistently adds up to large gains over time. You’ll be glad you decided to save as you begin to have access to the finer things in life and perhaps discover that you’re sporting a mysteriously brighter smile as well.
Roberta Pescow, NerdWallet