If you manage your money by having all of your income go to paying bills, you may be living above your means. Putting some money in a savings account is necessary, and you should fit savings into your budget.
Why you need to budget for some savings
When you’re making a budget, remember that life is full of surprises. Hopefully, you can presume what expenses you will have, and your budget will cover all those expenses. If so, that’s great! Remember, though, we know life is unexpected, which means spending deviates a little from our plan. This is why we need to account for those deviations. It might not seem as important when you have an unexpected birthday dinner for a close friend, but what about when that deviation is big? Let’s say your son comes home with a permission slip for a school trip, one week in El Salvador with his favorite teacher, and all his friends are going. You need to write a check for $600, and he can have a trip of a lifetime, or a pebble hits your windshield, and your insurance deductible is $500, now that $300 windshield comes out of your wallet. Good or bad, life happens, and that is why we need to set up a savings account and budget for it every paycheck.
How I save because I am no fortune teller
Some people try to put a specific dollar amount away every month. For some whose income varies, it might be easier to put away a percentage of our income. Some people put away 20 percent, others put away 30 percent, whatever you can manage. Now where to put your savings? If you don’t already have one, open a savings account. This is a good place holder for your money. This way, you can separate it from the money that you have budgeted to spend. Your savings account is a good place to save for future goals and unexpected expenses, vacations, shopping sprees, putting a down payment on a home, or that windshield. Always keep some of your money in a savings account, so if you need it, that money is available right away.
You can invest some of this money, start a retirement fund, or invest in the stock market. Find one that looks desirable to you and start saving for your future, because getting old is a great example of life happening. Some retirement accounts to look into are an IRA, Roth IRA, or a pension through your company.
Put a little money into the stock market. This can be a fun way to invest your money. Pick something that you trust, a company that you use, and believe is going to keep flourishing and making money. You don’t have to put the whole 30% there but take 30% of your savings and invest it. The best part about this is you can turn that money into more money. Who doesn’t like the sound of that? Watching the money you invest grow is super fun. If you are losing money, you can always move that money around, and you can never lose more than you put in.
Having savings in your budget is necessary because no one knows what the future may hold. If you are not already saving or you read this, and you might not be saving enough, sit down to do some money management, and next time you get a paycheck put something away for the unexpected.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.