Have you ever had unexpected circumstances suddenly come upon you? Maybe you’ve had a sudden medical issue that needed attention or unfortunate car problems such as something with the engine that suddenly needs fixing. We’ve all been there in similar circumstances such as these, but don’t always have the funds when these things happen.
This is why I think it is always important to have a way to save money when the unexpected things in life show up. When you have the funds available to take care of these things should come up, it makes it easier to get through and not have to worry where the money will come from in order get these things taken care of.
I want to touch a little bit upon the best ways to save money or put money back for sudden emergencies because they will inevitably come up.
Savings Account
The best way and place to save money is to have a savings account which can be setup at a traditional bank or credit union or online. There are advantages and even some disadvantages to both.
With having a savings account at a bank, you can get access to the money you’ve saved there fairly quickly should a need arrive to where you need to remove some money from it. That is a good aspect of it because things happen like a car needing a tow or an unexpected car repair that needs to be paid that day.
The downside of having access to a savings account at a bank is that you can be tempted to access that money quickly to spend it on other things that does not require immediate attention or is a need, but rather spending it on something you want to indulge yourself with. Trust me, this has happened to me before and I’ve regretted it every time. This is why I have the following preferred method for a savings account.
An Online Account – This is a much better type of savings account for me because I can have a set amount of money taken out each week and put into this savings account, but more importantly I don’t have quick access to the money I’ve saved up.
If I need to get access to that money, it takes generally 2 to 3 business days for it to transfer into my main banking/checking account this ensuring I will not have the temptation to put my hand into my savings account and spend it on frivolous things that are not important such as going to a movie.
The downside to this of course is that since you have to wait a few days before you have access to that money, you might not be able to pay right then and there when the unexpected things pop up. I do have a way around this though as I have some emergency credit cards so in case something happens such as an unexpected car repair, I can pay with my credit card, transfer the money from my savings to my bank account and then pay the credit card off.
One nice thing about online accounts is that you can have multiple savings accounts (even though some banks allow you to do that as well) and you can set goals and specific uses for them. You might be wanting to save up for a new car so you have a separate savings account for that or might be saving up for a vacation and you can have a separate savings account for that as well.
A minimum amount you should always have in a savings account
So what is a good amount of money you should generally try to always have in a savings account. A couple of years ago I went through a financial course of sorts that talked about the importance of having a savings account and one of the things they mentioned is that you should always have at least $1,000 saved up for emergencies.
This makes sense because a lot of car repairs or medical bills generally reach up to around $1,000. It was said in that course that should be one of the first things you should do is to save up to that amount. Then once you reach that, you can start saving for other things, but at least you’ll have that emergency money should a sudden need arise.
I’m just a little short of having $1,000 in my savings account right now, but I’ve got it to where my online savings account takes out $25 a week from my bank account so I’ve been building up towards that for awhile. Now with an online account you can set up with whatever amount works best for you to reach the goal of $1,000.
If I ever have any extra cash such as an unexpected bonus from my job, I try to put what I can from that into savings as well.
You might me surprised how easy it is to save money or put it back for emergencies or something you want to save for, but try not to use it for things other than the intended reason of why you are saving money. If you have any questions or concerns in regards to saving money, feel free to comment and below.