Keeping a nice padding on the side is a great idea for anyone over 20. It doesn’t have to be millions, but it’s always prudent to have more than just enough in your pocket to take care of anything other than your basic needs.
Money experts agree that savings is a crucial part of being an adult. It shows fiscal responsibility and a preparedness for unexpected things that could come your way. Having a nice amount of savings is a sure sign that you are a responsible adult.
What is having savings good for besides being deemed “responsible,” however? Here are some of the top reasons people need savings for.
You never know what can happen that can send us searching our pockets for money. It’s common for technology to spontaneously go wrong that you depend on, causing you to need something like a new computer, or perhaps discovering your basement is flooded. You just never know what kind of costs you’re in for at any given time.
Try putting aside a certain percentage of your salary each week towards emergency funds. You will become so accustomed to it coming out routinely that you will soon hardly notice it’s absence. Having a small amount less for leisure each week is worth the comfort of knowing that if something goes wrong you are protecting yourself.
Even with the best insurance in the world, a medical emergency will cost money out of pocket. If you don’t have insurance then you’re in for even more if something even as simple as a cavity happens.
If you save your money for anything, make it for medical expenses. There are far too many stories of people neglecting their health in fear of not being able to pay for it.
It’s important to live in the moment and enjoy your life, but also prepare yourself for a later time in your life when you won’t be able to work the same as you could in your younger days. Retirement is something that one should start thinking about ideally in their mid-twenties.
There are a variety of ways to go about it, most popularly with what is called a Roth-IRA. Rather than paying taxes at the time of withdrawing your funds, you pay taxes on the amount at the time of depositing them. Therefore protecting yourself from extra taxes in your older age.
From a broken window to a flat tire to something as serious as needing a new catalytic converter, you just never know what kind of amount a car problem can set you back for.
Having at least $500 put aside at any moment for car problems is extremely wise. Everyone who has ever owned a vehicle can tell you that nothing, even the smallest amount of maintenance for a vehicle, comes with a hefty price tag.