Sense & Centsibility Blog
Savings 101: Emergency savings vs. periodic savings
Monday, April 7, 2014 - 08:26
Everyone knows that having money set aside in savings is important, but either we can’t afford to put away money right now or we choose not to because living in the present is much more enjoyable. When you're cold and miserable stuck in Minnesota during the coldest winter in years, you would likely rather go on a Caribbean vacation than build up savings. In this case, however, instant gratification is probably not worth it if you’re depleting all of your savings or worse - accruing debt. If you go on that trip and come back to a car that needs a repair, you might not have cash handy to pay for it…which can lead to debt. So what’s my point? Having different types of savings accounts will allow you to have fun and create a safety net at the same time. The first step is setting up a budget to determine where your money is going and how much you have to set aside in savings. 'How to pay for the unexpected when you’re broke'.