As the song goes, money makes the world go round. It’s essential. Not everything is free; sure, you might find newspapers or various types of software that are, but it still cost money to make them in the first place. Money always goes towards something whether you’re buying or selling it.
But here’s a problem: what if you don’t have enough money? After all, it’s what your business is going to need to keep things moving.
The solution is simple: open a savings account.
A pivotal move, a savings account will undoubtedly be of great help for you not just in the present, but in the future. Here are five reasons as to why you should unquestionably open one to help you with your financial throes:
As soon as you open a savings account and begin to store money in it, that money begins to build interest. This is basically a small percentage of the amount of legal tender you have tucked away added to what is already there. For example, if you have around £2000 in your savings account, and the interest rate is 10% annually, then you will have an additional £200 in your account, adding up to £2200. Over time, this creates a rare positive case of the snowball effect, as the means are going to build up and you’ll have more at your disposal. It’s ideal to look for banks that advertise a high interest rate with their savings accounts because of this.
(Note: It must also be specified that interest can also mean a percentage of the money you’ve borrowed from your bank that you’ll additionally need to pay back as well. This is unrelated to a savings account, but this warning was provided to differentiate the two meanings to avoid confusion)
Emergencies – they happen. We believe that everything is going to plan, but then those plans are completely derailed and we find ourselves in a situation we never anticipated on whatsoever. Of course, the important thing is to bounce back and address, let alone fix, where things went wrong and move forward.
An emergency is something that requires immediate attention, and as it will dictate someone’s health, their life, or even their property (physically or intellectually), you’ll very likely be finding that you’ll need to be putting money towards something. This is where your savings account will come in handy, as you can use it as a method of insurance for unexpected large expenses you may be needing to spend.
3) Saving up for big expenses
This is without a doubt the most obvious reason in this list, but there are things in life that cost a lot. You may be finding that you already have very little money in your possession, and you’re very far away from the financial goal you need to reach that you wish to put towards something important. As noted in the first reason, money will build up over time, especially when it’s generating interest, so if you need to spend on something but don’t have the right sum of money – let alone it’s not incredibly urgent – you can wait until you’ve tucked away enough of it. How long you’ll be saving up for is like asking “how long is a piece of string”, but you’ll be finding that the end result will be absolutely rewarding once you know that you’ve accomplished your end goal.
4) Secure (except from yourself)
Just like how you wouldn’t give a complete stranger personal information or very private pictures, you most certainly wouldn’t want to be giving away your money without even knowing about it. If you were to hide away your money at home, there’s the risk that someone could still find it and leave you penniless, but if you have a savings account, you’ll have the best security available that your bank will provide. Of course, it’ll be secure from everyone except yourself, although how much you can take out in a given amount of time can vary depending on the policies of your bank, let alone your savings account.
5) It helps you budget
In relation to reason number three, you’ll be keeping a close eye on your money to make sure that you have enough of it to spend when the time calls for it. When you do start spending, you’ll also want to keep track on how much money is being put towards those expenses to ensure that you’re not spending too much.
This is called having a budget, and no matter what the business/organisation specialises in, you’ll be finding that the majority of said businesses/organisations use them to guarantee their professionalism by being thoroughly organised. Budgeting will most certainly come in handy if you have numerous savings accounts for different categories, as you’ll be able to focus on them individually without muddling them up with each other.
As money is unquestionably the most important resource in existence, and how it can potentially be finite for an individual, it’s essential that you start to keep hold of it within a savings account. Other than the money you’re already storing away, you’ll not just be adding to it with any you’ll be earning yourself, but with the interest that’s generated from it. Most importantly, you may be finding that the money you’re saving will need to be put towards an emergency that has taken place, so this will help you save up for possible large expenses you may unexpectedly come across. With you being the only person who’ll have access to the account, your finances will be kept safely as you budget how much you’re saving and spending along the way.