One financial recommendation clients sometimes think is boring and unnecessary is to have money in a savings account. We normally recommend that a working family have between three to six months of their living expenses in a savings account. For a retired family, we recommend having up to one year of living expenses in a savings account. For a business or a nonprofit organization, we recommend they have at least one month of operating expenses in a savings account. With that in mind, here are five reasons why it makes sense to have money in a savings account:
1. For unexpected expenses
Whether you experience the loss of a job, unexpected healthcare costs, or an unexpected automobile repair, there always will be things that are unexpected financially. If these costs are more then we can cover with our normal income, having money saved is a great way to cover these expenses.
2. To avoid borrowing
You may need a vehicle, want to go Christmas shopping, or just have some things that you want to fix up around your home. If you don’t have money saved for these, you will need to borrow for these expenses. By borrowing money for these expenses, you will have to pay for them over a number of months or years; and usually you will pay interest on the money borrowed. This may mean that a simple Christmas shopping trip could cost you a lot more then what you planned.
3. To meet someone’s need by giving
Paul tells us in II Corinthians 9:8 that we should “have an abundance for every good deed”. If your neighbor loses his job, the local fire company is having a fund drive, or your church asks you to consider helping a missionary that is in need, you can always be ready to give with money that is in a savings account.
4. Be able to take financial risks
Knowing that you have a surplus set aside in a savings account, allows you to take on the risk of losing money when initially opening a business, buying a real estate investment, or purchasing the stock of a company. Even if these investments lose value or fail, you can know that you have some stability by having money set aside in a savings account that is not at risk of being lost.
5. God says that it’s wise to save
Proverbs 6:6-8 “Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.”
The goal for money in a savings account is for it to be safe and available. That means the money is not at risk of being lost where it’s invested and you can get to it quickly if needed. With that in mind, here are a few places to consider saving money.
1. Your local bank savings or money market account
2. An online bank savings or money market account
3. A money market mutual fund
If you have questions on how much you should set aside in a savings account or where to invest it, please give our office a call. One of our advisors would be happy to talk with you.
by Ryan Kurtz
Medicare insurance is a topic where a fence analogy works well. You may be on the side of the fence saying “I’m too young to be thinking about Medicare”. If that’s the case and you don’t read further, feel free to forward this to someone who may benefit. You could also be on this same side of fence saying “I’m not ready to admit to turning 65 and all of this insurance stuff is overwhelming”. That response is understandable. Age 65 is a milestone birthday and the amount of mail that you receive reminding you of that can be daunting!
The other side of the fence has all the “seasoned” Medicare beneficiaries. You may have been on Medicare for a few years now and while you continue getting all of the marketing information each October during the Annual Enrollment Period, overall you’re satisfied with your insurance plan. Maybe, more accurate, is you just don’t want to think about changing your plan.
Finally, we have the middle of the fence sitters. If you’re one of these individuals you may have resigned to the fact that you are now Medicare eligible. You have read bits and pieces of the marketing information; you’ve talked to a few friends about their insurance plan; maybe you even attended an insurance company meeting discussing those plan details. At this point, you’re looking back and forth wishing you didn’t have to make a decision or that the decision was already made.
Regardless of where you are sitting, feel free to give us a call to discuss this part of your insurance plan. We can help make this process clearer so you can enjoy the green pastures of Spring weather and peace of mind!