Explore your Money Saving Benefits (2024)

FAQs

Explore your Money Saving Benefits? ›

First and foremost, though, savings enable you to prevent financial disaster when something unexpected—like losing a job, your car breaking down, or having a sick child or pet—happens. Similarly, savings support positive changes and enable you to plan for financing a home, retirement, and vacations.

First and foremost, though, savings enable you to prevent financial disaster when something unexpected—like losing a job, your car breaking down, or having a sick child or pet—happens. Similarly, savings support positive changes and enable you to plan for financing a home, retirement, and vacations.

Most people know they should be saving a portion of their income, but they might not grasp all of the benefits of doing so. Saving is an important habit to get into for a number of reasons — it helps you cover future expenses, manage financial stress and plan for vacations, just to name a few.

Studies have shown that people who spend their money on experiences and on others tend to be happier than those who save their money. So, if you're looking for a way to boost your happiness, spending your money may be the way to do it. Finally, spending your money can also help you to build strong relationships.

Savings account benefits include safety for your savings, interest earnings and easy access to your money. However, savings accounts may have drawbacks, such as variable interest rates, minimum balance requirements and fees.

Money, stress, and your health

Owing debts other than your mortgage might be particularly stressful, especially if you have credit card debt, personal loans, and more. On the flip side, saving money is associated with better mental health and well-being.

Key Takeaways. The 50/30/20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should be split between savings and debt repayment (20%) and everything else that you might want (30%).

Making & Saving Money

The key is to save money from the income you earn. This is the first step to accumulating wealth. Too often, people focus on earning or making money but never begin saving. As you can imagine, this often leads to disaster.

Human beings need money to pay for all the things that make your life possible, such as shelter, food, healthcare bills, and a good education. You don't necessarily need to be Bill Gates or have a lot of money to pay for these things, but you will need some money until the day you die.

Should I save money or enjoy life? ›

Saving for the future provides financial security and peace of mind, while spending on experiences and enjoying life is important for your well-being. It's wise to create a budget that allows for both saving and discretionary spending to achieve a healthy financial balance.

Meet Life Goals

Whether you've always dreamed of buying a house, purchasing your dream car or sending your kids to college with all expenses paid, saving money allows you to reach your life goals. These are often medium- and long-term goals that take multiple years to achieve, and that's where savings can help.

The 10% rule of investing states that you must save 10% of your income in order to maintain a comfortable lifestyle during retirement. This strategy, of course, isn't meant for everyone as it doesn't account for age, needs, lifestyle, and location.

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals. Let's take a closer look at each category.

How about this instead - the 50/15/5 rule? It's our simple rule of thumb for saving and spending: aiming to allocate no more than 50% of take-home pay to essential expenses, 15% of pre-tax income to retirement savings, and 5% of take-home pay to short term savings.