7 Savings Accounts that will help you prepare for anything!
Even a careful, responsible person can be caught off guard by an unexpected expense. This has always been true. As long as trees are falling on houses or parts of cars can detach from the whole, expenses will arise. The trusted way to deal with this uncertainty in the past has been to develop an emergency fund that you can fall back on when times get tough. Something that has gained a lot of popularity recently is a variation on this idea. Instead of just keeping a generic emergency fund, why not create separate savings accounts for high priority expenses that you need to save for long-term?
This can either take the form of completely separate savings accounts, or a segmented savings account that allows you to deposit and track funds that have a specific purpose. This is an awesome way to prepare for upcoming expenses or ensure that you’re ready for the unexpected. Below are 7 examples of reasons you might start this type of dedicated savings account:
Emergency fund
It would be wrong to overlook the long-running champion of savings-based preparedness, the Emergency fund. Traditionally it has been recommended that you should set aside enough to cover all of your typical living expenses for 2 months. This would hopefully be enough to ensure you have time to prepare in case of a job termination, or some other catastrophe. If you’d prefer more of a cushion, feel free to set a different amount, and begin to set aside a manageable amount on a monthly basis until you’ve reached your goal.
Home purchase or maintenance fund
Everyone who owns, or hopes to own a home should have some sort of a down-payment or maintenance fund set up, in order to help you ride any finance hurdles your largest investment might throw your way. Again, determine a value that you think would set you in good stead for the majority of home repairs, and work towards setting that away.
New Car / Maintenance
Basically, take the principles from the above point, and tweak it to apply to your car. From minor issues, oil changes, etc. to purchasing a new one when your current rust-bucket finally calls it quits, having a car-expenses related fund is a great way to prepare for any unexpected costs.
Self-improvement fund
I love this one because it is so full of hope. If you have any plans to further your education, take any courses, achieve any certifications, etc. start putting money away for it now! Self improvement is a true investment, as it has the potential to dramatically increase your earning capacity, and get you a step closer to your dream job.
Travel / Vacation / Leisure
There are few things in life that are more relaxing and provide a better retreat from day to day stress than a vacation, and preferably one that involves exotic locations! These are a distinct pleasure, and come with a pretty distinctive price tag. Very few people can undertake such a large expense on a whim, or without considerable planning. Setting up a dedicated savings account and depositing money automatically on a monthly basis will take the expense and stretch it out.
Christmas Savings
We recently did a post on how to cut the finance-pain out of Christmas, and this was one of the ideas that we listed there. Come up with a figure that you think will enable you to buy the things necessary to keep the kids happy, deck the halls, and really have a merry time. Take the total, split it 12 ways, and set up automated monthly installments.
Major Family Events
Having a family is another highly expensive part of life, but yet again, setting up a savings account fund can help you ensure that all those major family events are covered. Newborns, education, weddings, cars, etc. All of these carry a major cost, and the earlier you start to plan, the less you’ll be set back by a massive, one-time expense.
At Eastex Credit Union, we offer a selection of savings accounts to meet just about any need. We also take your financial security very seriously, and would love to discuss these or any other questions you might have regarding your finances. Why not come in and see us today?
