No one wants to think about car breakdowns, appliance failures, or other ‘bad luck’ events. But as much as we’d like to avoid thinking about them, emergencies do happen. That’s why building an emergency savings account that is dedicated to handling the unexpected is important.
When things are going well, emergency savings can seem unimportant. But in addition to your regularly occurring expenses such as your home or rent payment and utility bills, you’ll often run into unexpected costs that pop up.
Issues like car or home appliance repair are common occurrences. However, since they do not happen regularly, people often overlook these costs as they create a budget. By anticipating these costs, you can be prepared for these potentially expensive items.
Having emergency saving gives you the option of dealing with the unexpected without having to take on debt. Without the cushion of emergency savings, you may be unable to pay regular bills if you face an emergency and are more likely to need a loan or some other form of credit. Likewise, missed bill payments can be harmful to your credit rating.
Having emergency savings will give you peace of mind. Even if you can’t save much, a little money set aside can make a big difference when you need it and reduce your stress level until you do need it. Likewise, it’s easy. In many cases you can have a portion of your paycheck automatically deposited into your savings account, which makes it effortless. You’ll also likely find that you don’t miss the money you’re saving.
Contact your American Federal Banker today to discuss the benefits of setting up a savings account.