It is very easy to spend all your money when you get your salary. Items such as clothing, shoes, entertainment and dining out top the list. It is fun and enjoyable to spend money but at the end of the day, you do not have money when you might need it. Be smart and follow these guidelines on how to have money for the future.
1) Have an emergency fund-do not link your savings account to your checking account. Doing so might make it easier for your to dip into your savings account and spend it. The emergency fund is for crucial things like sickness, accidents and tuition for your children. Make sure this is not used unless it is necessary.
2) Have a retirement fund- some employers match your money in a 401K. You can continue to contribute to your office retirement fund so you can see this grow. There are also mutual funds that serve as retirement funds. You can invest in this. Set aside money every month and do not use the money in the account. Your money will grow faster this way.
3) Set aside money in your account to buy a house- renting is not a good idea especially if you can buy assets like a house. Buying assets will give you more equity in the future. You might even qualify for a housing loan if you have a better credit score because of your savings account. Having money in your savings account is proof of your stability and banks like that.
4) Set aside money in your savings account for investments- the money that is set aside in your savings account can be used for investments like stocks, bonds, CDs and mutual funds. These offer higher interest rates and will make your money grow aster. Make sure that you understand what these investments are all about so you know what your are getting into. Having money in your savings account will come in handy. You need money to grow money. That is how it is in investing.
5) Set aside money in your savings account to buy insurance- It is a good idea to have a health and accident insurance. Knock on wood but you can never tell when you will need the insurance. When you get sick the health insurance will cover the cost of the medical expenses so this is a good investment. You will save money by getting health and accident insurance. It is best to be prepared since some people have never recovered from the expenses of getting sick or having an accident.
6) Set aside money in your savings account to pay off your loans- paying off your loans is always a good idea. Some of the loans that need to be paid are high interest credit card loans, car loans and student loans. Some resort to consolidation since they do no have money in their savings account to pay off their loans. They are in effect getting another loan.
These are just a few tips that will serve as a guide for you. You will find out more along the way while you continue saving. Remember, save for a rainy day to have a bright future.
Guidelines for your savings account to have a better future with savings account. Also published at A Brighter Future with a Savings Account.
Tags: bank account, Business and Finance, investment, investments, personal finance, savings account