Life is an interesting adventure. In particular, you never know what will happen in a month, a day or even an hour, right?
Guess what, emergency situations can come up for anyone and that is when we wish we had some savings.
But, before jumping ahead, let me explain what is and is not considered an emergency situation. Let’s agree that annual bills like property taxes or car insurance do not fit into this category, let alone home and car maintenance. Then, what are emergency situations? Have you ever thought about the possibility of losing your job or getting struck with a massive health bill? Having any amount of emergency funds will come to the rescue when life happens. Some people believe that this is a kind of negative thinking, but I think that it is more of a pragmatic way of thinking, and it is always OK to embrace being prepared for unexpected events.
2. Save money for a new phone, car or even a trip to Hawaii
Yes, if you are the type of person (though we hope you are not) who really does not care much about emergencies, there is another reason to save some money. Life is short, and sometimes we really want to enjoy it in different ways. Saving for a new phone, car or a trip to Hawaii sounds great, doesn’t it?
Do you remember the last purchase you made with your own savings? If you do, then you may also remember that proud feeling and excitement that people feel only when some important goal is reached. It was not a long time ago when my phone accidentally got water damage, while I was in the swimming pool. As a graduate student, I could not really afford a new phone, so some old-fashioned “iPhone ancestor” device was there for me. Over the next several months, saving some money became a profound goal. While in the beginning it was all about buying a new phone, there is much more you gain while saving for something specific. Even though in the end you may not even buy what you needed, the feeling that you could achieve the goal is much more valuable. And of course you will be amazed at how much money you can free up in your budget by eliminating any unreasonable expenses.
So, next time you buy that extra cup of coffee, think about Hawaii.