Why Savings Accounts Are Important
Posted on 06. Sep, 2011 by admin in Personal Finance
Do you have a savings account? Most people have savings accounts but here is question you might not be able to say yes to. Do you have a savings account with more than $1,000 in it? The reason I ask you this is because you should have at least $1,000 saved up somewhere and it should be in the bank. The majority of people don’t have a savings account with $1,000 in it and that is why they don’t value a savings account. What you need to understand is that a savings account should be just as important as your checking account but in order for that to happen you need to use it. Security – The first reason as to why a savings account is important is because it will provide you with some sense of security. What most people don’t realize is that $1,000 in a savings account will most likely men that you have more than that in your checking account which is a good thing.
Accrues interest – If you have a savings account then one of the best parts about it is that you will get paid interest on top of your interest. What I mean by this is if you have $10,000 in savings and you get 1% interest then you will make $100 for that year and if you leave that $100 in there then you will gain 1% of the $10,100 the following year. The best part about this is it doesn’t stop and so the longer you let this accrue the more you will make. I know this might take a while to get a million dollars but just think of it as a small commitment to where you want to be financially. A savings account is a great tool that you can use to help fun your retirement or simply as an emergency fund. What most people in the world don’t have is an emergency fund and that is a bad thing because if you were to ever lose your job or have an accident of some kind you would want to be able to go to your emergency fund and take the money out.
