Tuesday, May 23, 2006

More details on savings account

Before, I was talked about the importance of savings account and personal financial budgeting. I also have mentioned that I will go for a vacation during this coming semester break. But, after I read the article again, I realized that I forgot one thing; to divide my savings. This is really important. So, today, I will share with you about this matter.

Why does it matter?

Imagine if I use all of my savings for my vacation and suddenly something bad happen to me. I have a friend who has his bag stolen while on a vacation. He lost quite large amount of money and the most important is, his passport. So, to avoid this thing, I have to put aside some amount of savings for emergency use.

What about if I suddenly fell sick during that time? This has to be considered too. So, here we go; some more money for medical emergency. Since I am not fully recovered from high fever, I think this money is really important. Moreover, I am a heavy smoker. So, I know the consequences of my ‘bad habit’.

How much money should I save?

This actually depends on you. If you have more problem than mine, than you should have more sections in your savings account. For example, savings for kids, family, home repayments, mortgage, debt consolidation etc. Since I am a student and does not have so many liabilities, my savings does not have to have so many sections.

So, the more liabilities you have, and the more plans you have for your future, the more sections of savings you need.

When should I do this?

As soon as possible. I assume that you don’t like to have no money when facing the unwanted occurrences, so that is why I recommend you to start dividing your savings as soon as possible.

P.S. Please tell you love one about this. Don’t let them facing emergency without enough money in their back. And this 5 star book might help you on how to do a better savings:The Insider's Guide to Saving Money



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Make Money said...

Hi guys,
Great article about the need for saving money.
It really does take discipline and a little planning. But the results are well worth it when you reach your financial goals.
Perhaps your readers will like another article about how to
save money.