What should you be saving for?

By Danice Harford
7/24/2020 | 4 min read

How many times have you read or heard that you should have at least 2 months of your salary saved up for emergencies? Countless times, right? While hearing it may be exhausting, it is a fact you can’t ignore. Life happens and it is important to have a backup for when life decides to throw its unexpected curve balls at you. This backup could mean that instead of finding yourself being crushed by waves, you instead just need to catch your breath and step on to the shore.

Savings do not have to be the death of you. You can start small and work your way up. You could try different savings methods like a savings account, a savings plan, a notice account, or even the old fashioned under the mattress.

There are a number of things that one should save for in case life happens. These include:

Paying off your debt

No one wants to be in debt their entire life! Sure, that credit card was supposed to just be for emergencies, but you started using it here and there, and then you realized you couldn’t pay the monthly bill. But don’t let your debt accumulate. Interest rates will make your fees skyrocket, and before you know it, the amount you owe will seem impossible to pay off. Instead, pay off a little per month. Try to meet more than the minimum due, if you can fit it into your budget.

Medical Emergencies

You never know when a cold can creep up on you and that is why it is always important to put funds away for any medical emergencies. You don’t want an unexpected illness or hospital stay to wipe out your savings, and you don’t want to be in debt or struggle to make ends meet just because of a medical problem. So, when drawing up your savings, make provision for your medical emergencies.

Periods of Unemployment

We have all heard from our financial advisors or our parents that it is important to have at least 2 months’ worth of income saved up in case of job loss. We live in an ever-changing world and we can never predict what is going to happen and with expenses and financial obligations, it is important to have a safety net in place to ensure that can protect you should this happen.

Retirement

The notion of starting early proves true when it comes to retirement. The sooner you can save towards your retirement, the better the chances of you maintaining your lifestyle post-retirement. We all deserve to retire with financial security and peace after all the hard years of hustling. So, start saving.

Children’s Education

Children are expensive in general with nappies, food, clothes, medical bills, and whatnot. Do not add their education expenses to this. Instead, try to put a little away into savings to assist with paying for their education. If you start early when they are young you could pay for their years at university without dropping a sweat.

Buying a car

Transportation is important, especially in the working environment to get you to and from work. While you may not be looking for an expensive car to allow you freedom of movement the monthly payment could be too much to fit into your budget. Try to save up to put a deposit down that will lower the monthly payment and save you money in the long run.

It is also important to set savings aside for car repairs and maintenance.

Buying an apartment  

Renting may seem like a good idea for now but eventually, you may feel the need to own a house or an apartment. The best way to prepare for that is by saving for a down payment for when the time comes.

Travelling

One mistake that people often make is to take a loan for travelling. While this may seem like a good idea at the time, in the long run, it may result in debt and you don’t want that. Instead, save for a few years and travel guilt-free knowing you do not have debt and interest accumulating while you sip your cocktails in Bora Bora. Keep a lookout for travel deals, these could save you plenty!

Investment properties

Investing in property is an excellent way to incur some income with little effort. Saving for an investment property, in particular, can provide additional income by renting it out on a short- or long-term basis. It is a good idea to invest once you have settled your debts and don’t have a lot of expenses.

We hope this helps shed light on the importance of saving. Remember, it doesn’t matter how much you save. The sooner you start, the better.

By Danice HarfordTags:
  • budget
  • Budgeting
  • debt
  • Discipline
  • finances
  • Financial education
  • getup hacks
  • GetUp Life hacks
  • Personal Finances
  • savings
  • Savings month

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