When it comes to financial wellness, money safety nets are a must. Savings can make a difference in your financial stability but even in how you approach the world and the way that you think. But how much money is good for your safety net and why are they so important?
If you’re looking to save money and build financial stability for your peace of mind and future, here are some tips to help you understand why it’s important and how to get there:
What you want to shoot for
When it comes to building a safety net, you want to start off small with working towards building up a $1000 to $2500 safety net. This amount of money can be useful for you should you have short-term emergencies like minor car repairs or co-pay with your insurance for an urgent care room visit.
While this isn’t the amount that you want to end up with as it’s a basic fund, getting started saving this amount can be useful for building a habit and having a little cushion. Then, as you start to progress, you can start working towards the goal of saving for a few months of bills, etc.
Why is it important
While you may have been living paycheck to paycheck, and it’s worked out for you, you know that it has been stressful at those times when an extra expense has popped up, such as car repairs with glass repair software, medical emergencies, or school needs for your children.
So, when you build up a money safety net, it can provide you with plenty of peace of mind and also help you avoid going in the hole financially should an unexpected expense arise.
Ways to have extra
If you’re looking to build up a solid safety net, consider extra work that will help you to set aside more money than you would otherwise. While this may mean adjusting your time off and putting in a little more work, if you want to focus on building up a solid emergency fund. Extra income can pay off big time so consider a side hustle when you want more in your savings.
Additionally, adding more to your savings when putting together your monthly budget can also help you to beef up your savings account.
Don’t rush it
Be careful about trying to save too much too fast. Although this may seem to go against what you’d think you should be doing, sometimes saving a lot in a short amount of time means that you’re stressing about spending money which in turn can lead to you actually spending more of your savings.
Instead, allow yourself a buffer of spending money with your budget, instead of putting that in your savings. It doesn’t have to be a lot but just enough that you can enjoy simple pleasures throughout your month.
This habit can actually help you save more, as you’re not stressing about whether or not you’re spending. With a budget that clearly lays out where your income is going, then it becomes easier to spend some, but also save more.
What’s next
Once you have a substantial safety net that gives you peace of mind, you can start saving for something else, such as your future. But savings sitting in your savings account can depreciate. What could be a next step for you is to look into investing your money.
Investments help your money grow and when done right can take you from one kind of income to another. Get professional financial help if you’re unsure of where to go from here.
In Conclusion
With money in your bank, you can achieve more. You can have peace of mind that you’ll be okay, you can trust that your future is taken care of, and you can consider investing. Start shopping for a savings account today!