Why Do I Need a Savings Account?

If you stop and think about it, there is never a wrong time to open a savings account. When you open a savings account, you are taking a prudent, responsible, and wise course of action. You’re putting money aside that you don’t really need to spend – even though you may very much want to – and it’s going to go towards some very important things. First and foremost, when you put money aside that you don’t need to spend, you’re building a sense of security and safety that will give you true peace of mind at night, knowing that you can use it to face an unforeseen emergency. It’s a kind of insurance policy against tragedy, in a sense. And beyond that general sense of well-being that a savings account provides, you can also see it as a place where dreams come true – that new house you want, or the trip to Asia, or your son’s college education many years down the road.

A savings account that you add to month after month and year after year also builds up a buffer against the realities of economic cycles. If you’ve been following the news, then you know that the country is in a serious economic recession, and it looks like things are going to get worse. Much worse, even. The number of companies letting workers go is rising, along with the number of workers they shed. Is your company next? And if you were to be let go, how long would you be able to get by without an income? That’s all going to depend on how much money you have saved. Many experts believe that people need a minimum of nine months’ worth of salary set aside in order to be properly covered should they lose their jobs. The fact is, for most of us, we have a lot less than that.

If you don’t have a savings account yet, make it a priority to open one soon. There are many with attractive interest rates out there, and a financial advisor or bank representative can help you navigate all the details and fine print.