5 Benefits of Adding to Your Savings Account Each Month

A savings account is beneficial because it lets you separate money that you do not need to pay everyday living expenses. If you add a portion of your paycheck to your savings account every month, you have the opportunity to build money that can be used for any purpose. The following are five benefits that adding money to your savings account every month will provide for you:

1. You Will Have Money for Emergency Expenses

There is no way to prepare for an emergency because you do not know what is going to happen in the future. For example, your car could break down, or you may need to take your child to the emergency room. The worst-case scenario is that you will lose your job. You can’t plan for any of these things, but you can plan to save an emergency fund.

If you are unprepared for what is coming, you may have to put your car’s repairs on your credit card. If you already have significant credit card debt, this can only make things worse. Avoid this scenario by beginning an emergency fund today, and make sure that you contribute to it each month. 

2. You Will Have Flexibility

We will continue with the theme of never knowing what is going to happen in the future. You may need a large sum of money later on. If you do lose your job, this would be devastating, but you would not have to worry about how you will feed your kids until you can get a new job. 

It can also be a good option for events that are not necessarily negative. For example, you may decide to start your own business, but you cannot expect to earn enough money to pay all of your bills right away. With savings in the bank, you can wait patiently and comfortably for your business to make a profit. 

Also, anytime that you feel like you need to purchase a big-ticket item, you will be able to splurge without putting more stress on your credit cards. The flexibility that a savings account offers you is priceless. 

3. You Can Get Your Hands on Money When You Desperately Need It

You may pay your bills with your checking account, and most of the time, this works out well. If you have an emergency or need to spend more money than you expected, you do not have to panic. If your savings account is connected to your checking account, you can easily transfer the funds you need to your checking account and avoid a bounced check.

4. You Will Have an Account Where You Can Save for Your Life’s Goals

You may want to purchase a house one day, but the best thing to do is offer a down payment. This may be between 3% and 25%. By adding to your savings account every month, you can watch your money grow toward the down payment you are going to need.  

5. You Can Create a Legacy for Yourself

By adding to your savings account every month, you can build up a sum of money that can go toward a donation to your favorite charity. You can also leave it to your children and grandchildren. The choice is up to you.