Why Do Savings Matter?
February 24, 2022
It’s often much more fun to spend the money you earn rather than to save it. Vacations, home renovations, getting a new phone are fun, but costly. Having a healthy savings account is important and actually makes be able to do fun things easier.
When you have a savings, you can buy those plane tickets when you find a great deal, not just the day you get paid. You can pay for emergency car repairs and not have to worry about taking out a loan and pay interest. With funds set aside for fun or emergency expenses, you'll save in the long run.
Depending on your finances, you might be able to save $2 a month or $200 (or even more) a month. Any and all saving is good saving! There are endless ideas for savings challenges and goals, so find one that works best for you.
Combine savings challenges with specific savings goals. At MSUFCU, you can set up and name your Certificates or sub-savers remind you of your goals. You can customize up to 10 sub-savers (not including Certificates) for goals, such as "Vacation," "College," "Home Renovations," and "Emergency Fund." Once you’ve set your goals, it's time to figure out a plan that works best for you — that includes increasing your savings potential.
Cut Your Expenses
If you buy coffee every day, try brewing coffee at home. Then, move the money you save into your savings account. You might also try no-spend days, weeks, and even months! You can save a ton of money and it also helps you become more aware of the expenses you can cut from your budget.
Cutting your expenses is daunting. One of your biggest expenses, housing, might not be negotiable. But there are smaller ways to save money that add up. If you have credit cards, shop around with different lenders and see if you are eligible for a lower interest rate. Do you stream movies or shows more than you watch cable? Consider cutting cable entirely. Or maybe commit to cooking at home every night except for once or twice a week.
It'll take time to figure out what you can live without and what habits help you save money. Don't be afraid to try different things if one cost-cutting idea doesn't work for you.
Automate Your Savings
To help you reach your goals, automate your savings. You can set up automatic transfers every payday (or whenever you'd like) to your savings accounts. Plus, while your automatic transfers are humming along in the background, you can still make manual transfers. Get an extra $100 from selling old furniture or $50 for your birthday? Bonus savings! Transfer that money into a sub-savings account or Certificate and reach your goals even faster.
Spend Your Savings (Wisely)
The point of savings is to have them when you need them. And you're the best person to decide when it's best to use the money you've saved. It's good to have a buffer in case of emergencies, but some savings goals have specific end dates in mind. For example, you might use all of your vacation savings when you go on vacation. Or you might be saving for a down payment. Part of the fun of saving is thinking about the things you can do with your money.
Savings are essential in emergencies. So while it's okay to spend your savings, it's a good idea to have about three to six months' worth of living expenses saved for emergencies. Learn more about MSUFCU's Savings Builder to help your initial savings grow faster than a traditional savings account.