The importance of a savings account

Everyone should open a savings account at some point in their lives. The earlier the better but better late than never as they say. People underestimate the importance of savings or aren’t taught of the benefits from an early age. It’s often due to lack of savings in people’s bank accounts that economies undergo a crisis phase. If more people saved there would be more stability in the economy. Here are some reasons why it’s so important for you to keep a savings account and ensure there’s always money in it.

Savings can help you learn money management from the first pay check. Putting a few dollars or a few hundred dollars each week or month will teach you to live on less and manage your money. If you know that 20% has to go into savings each month you’ll know that you’ve only got 80% of your take home income to spend.

A savings account can stop you from living pay check to pay check. Unfortunately a large number of people don’t put money away into their savings account each month and are always short before pay day. By keeping a regular savings account even if you’re only depositing $10 each pay check it will help you to stop spending everything you earn. You can always increase the amount by a dollar or more each month.

Having a savings account gives you a record of savings. If you are applying for a loan or mortgage having a savings account that has been regularly topped up will give you a leg up when you’re applying for credit. It shows the bank that you are responsible with your money and they will be able to trust that you’ll make the monthly repayments.

You want to have a safety net for when times get tough. An emergency, accident, or losing a job can place a strain on finances. A savings account can make things a little easier at least from a financial point of view. You don’t want to be worrying about where you’re going to get the money if you have to suddenly travel, move or your front tooth falls out.

A topped up savings account can give you financial freedom. Financial freedom means having enough to live off and enough in savings so that you don’t have to worry about unexpected costly surprises. It doesn’t matter whether you’re 18 or 40, opening a savings account and depositing a little bit in it each month will give you control over your finances and give you peace of mind.

For more information regarding opening a savings account, you can check out Central Bank's Personal Savings page or you contact one of our local branches.

This piece was written by Amanda Hash and used with permission.