Why You Should Get Serious About Saving

Good financial health is all about making smart money moves — and that includes moving money right into your savings accounts. We say “accounts” because with multiple savings accounts, you’re able to target funds toward specific goals and track each separately. Below we share why it’s important to grow home, auto, emergency and fun savings accounts.

Home

There’s no place like home! Until your HVAC system dies or your flooring desperately needs to be replaced, which averages over $15,000! Managing the maintenance of your home is never-ending and stressful, especially if you have $0 reserved for repairs or replacements. As much as we’d like to ignore it, things will inevitably break down after years of wear and tear.

In 2018, 88% of homeowners completed a home repair. Home renovations and improvements also cost the average homeowner nearly $5,000. Do you have five grand socked away? The homeowners and home professionals network the Porch stresses: Hope for the best, but prepare for the worst. Generally, it’s good to have 1% of your home’s value saved. Take a moment to check out the Porch’s “Repairs in Review” to know more about what to expect as a homeowner.

Auto

It can ruin your day — a flashing check engine light, a leak in your garage or shaking when you brake. Maybe it’ll go away, or it’s not a big deal. Well, an AAA study revealed that one third of U.S car owners defer or neglect necessary services or repairs. Procrastinating on routine maintenance puts your safety at risk, and the potential for more expensive repairs and a vehicle breakdown. According to Cars.com, AAA advises saving $50 a month for emergency auto repairs. As you save, the following can help make your car maintenance more affordable:

  • Review you owner’s manual and online resources, so you’re informed about required maintenance and average costs.
  • Ask for word-of-mouth recommendations for a local and trustworthy mechanic (instead of working with an expensive dealership).
  • Research “how-to’s” on YouTube to learn how to do your own repairs.

Emergency

An emergency fund can rescue you from home and auto expenses, but it’s good to have a separate fund for an unexpected medical emergency, unemployment and simply peace of mind. A savings account provides stability, which gives you financial confidence.

If you Google “how much should I have in savings?” You’ll find all kinds of advice: Save 3-6 months of living expenses or save based on your age. Although this advice can guide your goal, keep in mind no financial situation is the same. In fact, if you have $1,000 in savings, you’re doing alright: 78% of American workers live paycheck to paycheck, and 29% of households have less than $1,000 saved. Strive for an emergency buffer that you can feel comfortable about. Then as the numbers increase and the fund grows, saving could start to feel more exciting than spending. And you’ll feel prepared when you have to tap into it.

Become a Super Saver

Whether you’re taking the first step toward saving or growing your fund, these tips can help improve your money management:

  • Say goodbye to your credit cards. You don’t want to rely on your credit card as a crutch. The sacrifice of savings beats the distress of debt.
  • Visualize meeting your savings goals. If you can see it, you can achieve it! The practice of visualization is a powerful tool for manifesting what you desire.
  • Open a short-term savings certificate or high-yield, accessible savings account.
  • Save for a vacation or something fun too. What good is earning money if you can’t — responsibly — enjoy it?

Prioritize a Financial Peace of Mind

All of this information isn’t meant to discourage you or add more stress to your finances. Many of us struggle with saving at all — let alone saving in multiple categories, plus retirement?! Now that you know more about the importance of saving, take it step-by-step. Prioritize saving, start small and stick to a plan. Every little bit benefits your future!

The material presented here is for educational purposes only, and is not intended to be used as financial, investment, or legal advice.