When’s the Right Time to Break Into Your Savings?
Everyone knows that it’s important to save money. We all try to contribute at least some of our funds into a savings account and, over time, it will accumulate and we’ll have plenty to spend on emergencies. However, it can sometimes be difficult determining when we should break the piggy bank and start using it.
One of the biggest issues with using your savings is that it can lead to bad habits. When you start using your savings account for small things like furniture or personal entertainment, you’ll quickly deplete those funds. It’s a good idea to train yourself to never touch your savings, but you can reach a point where you’re saving too much. If you find that you never touch your savings, then this article will give you a few examples of when you should actually break into them and start using it responsibly.
Paying off your debts
It might sound weird to have savings while you’re still in debt, but it’s actually not too uncommon. Many of us automatically pay money into our savings accounts so it’s not something we actively do, but we sometimes mix it up with essential expenses and thus, we end up with a large amount of savings while still being in debt. Depending on how much debt you’re in and with how many companies, services like debtconsolidation.co can sometimes give you a breather by consolidating all of your debts into a single contract. You can then start using your savings to pay off your debts, and this will help your credit score as well as your personal health. No one likes being in debt because it can be a heavy weight on our shoulders, which is why using your savings account is a perfectly acceptable reason to break into your emergency fund.
When you want to invest
Perhaps your friend has proposed a great business idea to you, or maybe you’ve realised that keeping money in a savings account is rather pointless. Many people chose to invest their money instead of keeping it in a savings account. This is a question that many people have asked themselves, and you can look at this article from moneyadviceservice.org for some advice on how to make that decision yourself. In short, keeping your money in a savings account isn’t going to make your wealth grow, but investing in a business or stocks can be more profitable and will continue giving you money.
Is there an emergency?
A stash of savings can also be seen as an emergency fund, so if you’re currently experiencing a crisis it may be worth your time to break out the savings and use it for something important. A good example of this is if your laptop breaks and you can no longer operate your company. Replace it immediately so that it doesn’t stop your business in its tracks. Another good example is for your healthcare. If you’re suffering from an illness, then it makes sense to use your savings to pay for healthcare such as medication or a hospital visit.