It seems to me that the buzz words right now in the area of personal finance is security and stability, and it is right so. During these times, there are too many things that can totally drain your money away.
The key here is always to be prepared so that you are ready for something unexpected that could happen. You need to understand that anything could occur and your personal finance situation could be in problems. You could get retrenched or fall into serious illness. Either way, you have to be ready when things like that happen.
Get a Plan
Have a plan, that’s the best thing you can do right now. You have to work it into your budget now. You may have to make some changes to allow for that extra money. What you want is to prepare a second savings.
This second savings is mainly for emergency purposes only. Youu should plan for at least 3 months of your salary so that if you are into financial problems you can live without working for 3 months. Once you reach that goal you can start contributing to the main savings and let the second savings account sit and gain interest.
Never take any money out of this account and if you do, make it as a ‘loan’ from this account and be sure to ‘pay back’. It is important to never take money from the second savings unless absolutely necessary. You may even want to stipulate rules for the account so everyone knows when money may be removed.
One of the biggest mistakes with savings accounts is that people think they can repay the money and take money out with never actually repaying. Then when the money is really needed it isn’t there. Savings accounts are not meant to be spent, so do not use either savings account unless you must do so.
Here’s a sad truth: Most people did not save at all. You probably have a savings account as part of your personal finances, but many people do not even have that. If something like a car repair were to pop up you could probably use money from the savings you have been building. However, if you do not have a savings then you may be in trouble.
Additionally, if you failed to save at all then you do not have the extra money and have to find a way to work the expense into your budget. That can be quite hard since most people have a tight budget with little extra cash on hand.
Getting yourself to save may be a challenge. Making excuses about why saving is impossible is common. The point is that you have to push excuses aside and realize the benefits of saving. No matter how little you may be able to contribute to a savings account, in the end it will add up.
You will never be able to learn to save if you do not start. If you have one savings then start working towards building the second, emergency savings account. Add it into your budget. Even if it is only a few dollars each month, it is better to have some savings than to have none.
Just remember the benefits of having extra money saved back. No one wants to be hit with huge, sudden expenses so with a good savings you have the power to prevent that from happening just by creating a 2nd account today.