One question you should ask once you start making money no matter how little should be about savings.
Savings is so important to our lives but many of us seem to ignore it perhaps because we don’t know how far savings can go to save us from unforeseen issues.
Your saving habit says a lot about you and if your saving habit is a very poor one, when people talk about the relationship between lack of money and stress, you should be able to relate.
But hey, before it gets to that, you have a saving grace to read this piece and get to know about the three types of savings that can save you from money-related stress.
1. Emergency Savings
Emergency savings could prevent you from having bad debts.
Have you ever thought of saving because of unexpected issues? This form of saving is a fantastic backup plan. Instead of plunging yourself into debt or selling your properties due to unexpected financial issues such as long-term illness and job loss, emergency savings helps you to take care of these and prevent you from being in debt.
2. Retirement savings
Retirement savings is a lubricant that polishes your “desirable standard of living” after retirement.
You might think it is too early to save up for your retirement. How wrong. It is never a bad idea to start early. Apart from monthly pension savings which is compulsory under the law, also set something aside every month, no matter how small, for the day you call it quits.
If you want to retire at the age of 50 and live a comfortable life afterwards, you should dedicate an account for your retirement days.
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3. Personal Savings
Proper personal savings grows your income
I am saving for an emergency and at the same time saving for retirement, where will I get money to buy my own car, build a house and take care of other responsibilities?
Okay, calm down. Think of personal savings as the money you put aside for immediate needs after taking out your monthly expense. The money that is left can be considered to be your personal savings that you can use for other needs that pop up.