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You don’t have anything except for rolling tumbleweeds sitting in your savings account right now. It’s a desert in there, and you need to change that as soon as possible. It’s time to focus on saving money.
Why? Read ahead to find out.
You’re not prepared for any emergency expenses that come your way. If your car breaks down on the side of the road and you need to call a tow truck to bring it to the nearest mechanic, you can’t afford to pay for the cost of towing or repairs. If your dog gets mysteriously sick and needs to be rushed to the veterinary clinic, you don’t know whether you’ll be able to foot the bill that they give you after the treatment’s done.
An emergency fund could change that for you. If you built a reliable emergency fund, you wouldn’t have to worry about any surprise expenses that came your way. You could use your personal savings to cover the expenses out of pocket right away.
What If You Don’t Have an Emergency Fund?
Without an emergency fund sitting in a savings account, you’re leaving yourself open and unprotected against urgent expenses. You’re setting yourself up for a very stressful situation where you’ll have to find an alternative way to pay off an expense without upending your financial stability. For instance, you could go to a website like CreditFresh and see whether you’re eligible for a fast personal loan. If you’re eligible, you could fill out and submit the personal loan application online. You just might get approved for it.
With an approved personal loan, you could use borrowed funds to handle your urgent expense in a short amount of time. Then, you could repay it through a monthly billing cycle. Eventually, you’d pay off what you borrowed and move forward.
It may be comforting to know that there are emergency payment alternatives out there, but you should only look at them as last resorts. Personal savings make for better safety nets. So, it’s time to protect yourself and start building an emergency fund.
Interest Rate Hikes
Another reason why you should focus on savings right now is that the Federal Reserve recently increased interest rates. The Federal Reserve has done this to get a better handle on steep inflation rates and to encourage consumers to save more and spend less. The hike has resulted in higher interest rates in savings accounts. Higher interest rates mean users can yield more passive growth from their accounts, boosting their savings balances.
So, this could be the right time to open a savings account!
Economic Difficulties on the Horizon
There is a very real possibility that the United States will have a recession this year. In December 2022, a Bloomberg survey of economists found that there was a 70% chance that the year 2023 would result in an economic recession.
An economic recession could mean that regular expenses will be higher, while income levels remain stagnant — or worse. Many people can lose their jobs during economic recessions or have their hours cut in order for businesses to cope with the financial strain. It could be a bumpy road to get through unscathed.
One thing that can help you get through a difficult economic time is a cushion of personal savings. You could use savings to bulk up your budget and help you manage raised expenses, like steeper energy bills and higher housing prices.
You can also rely on your savings in case your source of income changes. If you ever have the misfortune of losing your job, you can use your stash of savings to cover your essentials while you apply for government aid and search for new job opportunities.
You’ve been living without savings for far too long. It’s time to make a change. Start putting money away!