Saving money can be nearly impossible if you aren’t in the right headspace. Without a genuine intention to save, it’s easy to list excuse after excuse to spend your money in other ways. Before you know it, another month has gone by without any more money in your emergency fund.
Does this sound familiar? Here are five reasons you need to change your mind about savings.
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1. Things Can and Will Go Wrong
Like it or not, emergencies are a reality of everyday life. While some people are luckier than others, everyone runs into trouble at some point in their lives.
One moment you’re fine, and the next your dog gets mysteriously sick, and you need to take them to the emergency overnight clinic. Or maybe your oven stops working, and you’re stuck buying a new appliance years before you expected.
Sooner or later, you’ll run into something that you can’t afford. Don’t stick your head in the sand — it’s better to acknowledge this stressful situation so that you can prepare in advance.
2. You Can Minimize Your Reliance on Credit
Why can’t you just put unexpected expenses on a line of credit? The online lender Fora explains that a line of credit acts as a backup to your emergency fund, filling in when your savings fall short of what you need.
Think of it this way. When roofers and other contractors work far above the ground, they wear safety harnesses — not because they plan to fall but so that something will catch them in case they do.
Your line of credit works the same way for your emergency fund. Treating it like a safety net can help you reduce your dependence on borrowing and minimize the financial strain of paying your balance off.
3. You Can’t Always Rely on Others
A well-stocked emergency fund means you don’t have to turn to others for help — which is a good thing, because they won’t always be willing or able to do so.
Friends and family probably want to help out when you fall on hard times, but they’re just as vulnerable to the unexpected as you are. Everyone is feeling the crunch of inflation. Your loved ones could be going through something just as difficult in their own lives, and their financial battery doesn’t have the juice to give you a boost.
4. Avoid Late Fees and Penalties
Many emergencies are urgent situations that require immediate attention, like a car repair on the only vehicle your family relies on to get to work, pick up groceries, and attend medical appointments.
Without savings tucked away, you might find it hard to address your auto bill promptly, which can lead to late fines and other penalties.
A savings account gives you the freedom to take action right away and avoid the consequences of late payments. The financial flexibility to tackle emergencies as soon as they arise can save you money in the long run as a result.
5. Prevent Procrastination and Extra Work
Some emergencies might not be as urgent, so you may feel comfortable postponing repairs. It’s tempting to delay addressing these issues, hoping they will resolve themselves somehow.
Unfortunately, this technique can be risky. Procrastinating auto and household maintenance often leads to more significant problems and increased costs down the line.
An emergency fund helps you address these emergencies immediately, preventing them from snowballing into larger and more expensive issues.
Start Saving Today
Make saving a priority today — even if it’s just $25 a month to start. An emergency can help you when life goes sideways without relying on a line of credit or other people.