You may wonder why some make a big deal to save money. If you have enough for everything you need such as your food, rent, utilities, overhead expenses and the occasional shopping spree, why should you worry about putting anything aside each month?
There are many reasons why we would save money
You may be saving up for the down payment for your first home; your dream vacation or gift for a loved one. Otherwise, you may be saving for sinking funds, (meaning funds put aside for future repairs) or setting up an emergency fund.
Do you have an Emergency Fund?
It is important to set aside some funds to cover for unexpected expenses. This could be used to cover an unexpected car repair, your emergency use or a sudden job loss.
“Your emergency fund should ideally be about 3 to 6 months of your monthly income”
Building an emergency fund
There are many methods to building an emergency fund. You could put aside a comfortable amount of money in a separate account that you normally do not access.
Alternatively, you can arrange for an automatic savings plan using the Baiduri Bank Standing Instruction service.
This has other advantages than just the convenience of not having to manually deposit funds into your savings account each month. For instance, this type of system makes it easier to stick to a personal budget, since it is harder to overspend and dip into your savings once they are automatically removed from your bank account.
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