The Covid19 pandemic has taught us many things and as we can see, disaster can strike at any time. Such events are hard to cope with and bills still have to be paid - life has to go on. Putting money aside to help you manage such circumstances is imperative. This can tide you over during a period of unemployment, for instance. The same goes for a medical emergency. Of course, saving money is not only for disasters. It can be the key to fulfilling dreams and life goals. Here are some reasons why you should save money:
1. Save for an emergency
By its very definition an emergency will strike out of nowhere and often when you least expect it. That emergency could be replacing a stolen laptop, transport costs, losing your job, a divorce, an expensive building repair or getting sick, to name just a few.
Martin Lewis, founder of MoneySavingExpert.com, recommends setting up an emergency fund or a nest egg to the value of “at least six months’ worth of bills”. This will help tide you over if you’ve lost your job, fund that expensive replacement of your pipes, and, in the event of an illness, you will not have to worry about finances, medical care or any of the associated cost of the illness.
An emergency fund should allow for between six and nine months of expense, advises US-based financial site Money Under 30. If these were to come to €1,000 a month, that's between €6,000 and €9,000. For many, it is difficult to put aside so much money, which is why a savings account can help.
2. Save for retirement
It is the wise thing to have funds available for an enjoyable, stress-free retirement. The last thing you want to be worrying about once you reach retirement age is having enough money to cover expenses, be they for food, medical costs, rent or supporting and treating your children and grandchildren. It stands to reason that the sooner you start saving for retirement, the less you will have to save in the future.
3. Family growth
It is no surprise that having children brings great expenses, as it does joy, of course. The list of expenses that come with family growth can include needing to buy or rent a bigger living space, having to buy more clothes, inevitable medical expenses, greater travel and holiday costs, education, and simply needing to buy more groceries. Having money put aside for such costs will help you continue to live a comfortable life as well as avoid the stress and worry that come with needing to meet these expenses.
Whether it is a course you wish to pursue to advance your career, private lessons in music or dance for your children, or a university degree online or abroad, you will need extra money to cover expenses. Expenses here are not just tuition fees, but also travel and accommodation costs if the course is overseas.
5. Purchase of a home
If you are thinking of buying a house you will need a down payment for a loan, which is generally 10% of the asking price. In addition to this there will inevitably be other costs that come with purchasing a home. And, of course, you will still need to have money to meet other expenses of daily life. For this reason, it is essential that you have money put aside.
Start saving now!
It is never too early to start saving ... nor too late! By setting up a savings account you can make your money work for you without having to do anything. With an interest rate of 1% when locking your savings for one year, MeDirect makes it easy to start saving with as little as €100.
And to make it easier, MeDirect are giving you the facility of becoming a customer from the comfort of your home by completing a short questionnaire through our website when clicking Become a Customer.
Click here to find out more and to open a term deposit account online today.
MeDirect Bank (Malta) plc, company registration number C34125, is licensed by the Malta Financial Services Authority under the Banking Act (Cap. 371). The Bank is a participant in the Depositor Compensation Scheme established under the Maltese laws. Rate quoted is gross of tax on a per annum basis. Interest is paid into a savings account. Terms and Conditions apply.