First thing’s first, if you are in debt, you need to pay it off. Start by using available money to pay off your debt. Only once you have paid off your large debts, you can start planning on saving.
The real question you might be wanting the answer to is why should you be saving in any case. Frankly, there are many reasons why you need to save money. However, the list below is a count of the top 4 reasons why you need to start saving.
ONE: Periods of Unemployment
Save up for periods of unemployment. Save up for times when you won’t have an income for a while. The company you work for could be retrenched or you may lose your job to whatever legal reason.
Make sure that you are prepared for such incidents. One can never predict that they will have a job throughout their whole working life. You should also consider the high unemployment rate, in SA, after tertiary. Your savings could come in handy during this time. It should be able to cater for you while you look for a/another job.
Everyone wants to retire comfortably. Open a savings account aimed only at saving for your retirement. It’s advisable that you save for that. For some, retirement might come early due to disabilities. Your emergency fund can also come in handy at a time of early retirement.
Your Children’s Future
If you plan on having kids and taking them to college, you should consider saving up for their education. You should start saving up for your children while they are still young. The previous article spoke about saving up for your kids from as young as they are one day old. Whether you are saving up for their education, their well-being or their health insurance, be sure to invest in them.
Save up for Emergencies
One should also consider saving for a home and car repairs in case anything comes up. Things will always need fixing in those fields. Savings under this category will always come in handy if you end up bumping a pole or there’s a leak in your house.
You will not need to take out a loan for repairs because you will have saving for it. It would be wise to save up for medical emergencies too. In fact, one must save up for anything that could happen. It’s always good to be prepared.