How Do You Know You’ve Got Enough Savings?
Saving your money is a smart thing to do, there’s no doubt about that. If you have some cash put away for the future, any unexpected cost that pops up can be quickly dealt with! And when you know you’ve got that coverage, you can rest your head easy at night without the worry that a large purchase is going to send you into debt.
Which is why it’s key to determine if you’ve saved up enough. It’s much better to know you’re putting enough away each week, rather than blindly pop pennies in the pot. But how do you work this out, exactly? How can you be sure you’ll have enough in the bank to keep you and your family safe in the future? Follow these tips to help you to determine if you have enough saved or not.
Even stacks of pennies can add up to quite a few pounds, so look after them! (Source)
Look at the Average Emergency Cost
To make sure you’re not desperately researching in the future, and can approach them with a level head, you’ll need to do some research. You’ll need to look up what the average cost of an emergency is, for multiple different areas of your life. After all, all we can do is predict and prepare!
How much would it cost to keep the electricity repaired, if a storm knocked it out? What kind of budget means there’s always going to be some non perishables in the food cupboard? How much would it cost to allow you to take time off work to recover from an accident or injury? What revenue would you lose out on? Even a ballpark figure works well here, and overestimating is advised. It might even make your future emergencies a lot more comfortable.
An emergency fund is a financial buffer. In the event that you have a personal financial dilemma. Saving an emergency fund will allow you to cover the cost and keep you out of debt! Usually I would advise that you aim to save at least 3 months worth of wages but you should really look at your costings and what kind of money you would need should the unexpected happen.
What Do the Experts Say?
Financial experts know the ins and outs of the financial world, and how quickly it can change (for both better and for worse!). Getting yourself a financial advisor, even just for an hour or two, can be a very beneficial move. These advisors can help anyone with money worries. If you’re worried about the potential for debt in your future, these are the people who can help you to stop the possibility in its tracks.
But truth be told, you don’t even need a consultation with one. You can just look online for expert consensus. There are plenty of free websites with the aim of making this essential financial knowledge accessible to everyone. Make sure you take your time to go through each one.
Tips to help you save more
- Learn how to budget better
- Automate your savings (set up a weekly/monthly standing order)
- Look to increase your income with a side hustle
- Find a good savings account (seeing the interest you’re earning might motivate you to save more)
What does a healthy savings account look like? Well, it’s the one that’s updated often, and it’s the one you keep your eye on. It takes a lot of forward thinking to save properly, and a few goals here and there. All in all, we want to make sure you know, and are comfortable with, your financial security.