Do you feel you always come up short on cash when you really need it? One route to financial freedom is opening a savings account. Many people associate the term “financial freedom” with the wealthy. However, what it really means is that you don’t stress about having money to cover emergencies when they pop up like car repairs, appliance repairs, etc. Keep reading to learn more about the importance of making a savings account part of your personal banking portfolio.
Build Wealth While Investing
Have you thought about investing in the stock market? Maybe you’re interested in buying investment properties. Whatever your long-term financial goals are, you must have money to invest. That means coming to the table with a significant amount of cash. Putting your extra money in a savings account is a great way to accumulate the money you need for bigger investment opportunities while still earning a small amount of interest on it while you wait for it to grow.
Break Your Dependency on Credit
Too often, people rely on credit cards or personal loans to help them handle unexpected emergencies. When you have savings set aside, you don’t have to use your credit cards and pay interest on the purchase. Ideally, you want to have six months’ worth of your monthly income in a savings account. This protects you financially should you lose your job or get sick. Don’t worry if this isn’t something you don’t have right now. It takes time to build up savings, especially when you’re starting with zero dollars saved. The important thing is that you start. Fortunately, many banks offer online savings accounts, and you can easily open one online. This makes it more convenient to get started right away.
Gives You Flexibility for Emergencies
You might already have money saved in a 401(k) plan or another savings program, but the funds set aside in these plans aren’t easily accessible. Any professional in the personal banking service industry will tell you it’s great to have retirement savings, but you also need everyday savings that’s accessible. You need a savings account that you can withdraw money from if you need it immediately. Having a savings account means you don’t have to pay penalty fees when withdrawing a large sum of money for emergencies.
Keeps You from Spending
Many people only have one personal bank account, and that’s their primary checking. The issue with not having a separate savings account is that your money isn’t earmarked for saving and spending. It’s all in one big pot, so to speak, and too easy to spend without thinking twice about it.
Having a savings account attached to your checking account isn’t always a great idea, either if you’re prone to transferring money from savings to checking on a whim. If you think you might struggle with this, consider opening a savings account at a different bank. Some people even keep their savings accounts very simple, with no debit card access. When they need to make a withdraw, they go to the bank to complete the transaction. This inconvenience can help you save more money.
Are you ready to open a personal savings account in Kingsley, MI? For great products, rates, and best personal banking service contact Forest Area Federal Credit Union. They offer regular personal savings accounts as well as Christmas and vacation savings accounts for members. Call them today at (231) 879-4154 to speak with a personal banker.