Saving for a Rainy Day

Life is often times unpredictable and no matter how much planning we do, there is usually something that will come and upset the apple cart. This is so much so in the family finances. It is always prudent to keep some money aside for a rainy day. This is not to say that we anticipate difficulties, but rather we be prepared, should they suddenly fall on us. Setting up a rainy day account is wisdom that will result in peace of mind knowing that should anything befall us, then we can be able to tackle it. In some cases, where there is financial prudence the rainy day account stays virtually untouched and this money is then available to be invested in other ventures.

Budgeting for an Emergency Account

When setting up an account to cover for emergencies always be realistic and not go overboard such that other financial obligations are strained. Such an account should be factored in family budget so that the percentage that goes into it is predetermined. Since this money should be accessible any time there is an emergency, it is not wise to keep it in an account with limited withdrawals and this calls for financial discipline so that it remains untouched otherwise.

Setting up an emergency account will call for certain adjustments in the previous budget. This may be difficult at the beginning but the benefits that this will present in future will far outweigh the initial discomfort. When this money has been saved for some time without being touched, a certain percentage can be taken out and used for either a family holiday or a present. This should only advisable after a number of years of saving such that a ten or twenty percent deduction will not have a major impact on the account so as to cripple it. 

Saving Money for Future Success

With the year coming to an end and the New Year fast approaching, resolutions are being thought out and made. New Year resolutions are basically decrees to do new things, do things differently or better in the coming year. Resolutions for the most part are to do with lifestyle changes or financial matters. Most people make out elaborate list of the resolutions they desire for the New Year, while others are made silently at the back of the mind. Sadly most of these are never followed through fully mostly because some are not realistic or the will power is lacking.

Starting a Family Saving Culture

Financially, a great resolution to make in the coming year is to start saving or to increase the savings one makes periodically. I heard once said that one’s future success is not dependent on their current earnings or spending power, but on their current savings. This is wise since money spent cannot be recovered, but money saved can be invested in worthwhile ventures for the future. No matter one’s earnings, if no savings are being made then the future financial success of the individual may not be easily achievable. Inculcating a saving culture encourages financial savvy and future success. This New Year the entire family can decree to start a joint savings culture while teaching financial truths to the young ones.

A saving culture is not without sacrifice and the individual starting to save or increasing their savings should be ready to forego some things so that future success can be achieved. New Year resolutions are made so that different results are achieved. It is said you cannot expect different results from doing things the same way. So, for there to be a difference in financial stability one has to get out of their comfort zone and start saving more.

Saving for Affordable Education

It has been said that education is the best gift that a parent can bestow on a child and so it is important to plan well to ensure that the best education is attainable for the child. A good education can be expensive, but with proper planning, the burden can be lessened on the parent or guarding. It is important to start by having an estimate of the cost of education that is considered best by the parents. Once this is done a good savings plan must be put in place that will put away a substantial amount of money well in advance.

Ways of Saving for Education

The best way to ensure a good education for a child is to start saving early way before the child is ready for school. This will ensure a good financial base when the child is ready and less stress for the parent. Some parents even start this when expecting a child or as soon as the necessary documentation for account opening in financial institutions, like the birth registration certificate, is processed. Most insurance companies are incorporating an education policy as part of their life insurance products. In this way a small premium is paid monthly, and the policy matures in different stages in a child’s life, making it easy for parents to offset high education cost, all the way to college.

It is becoming increasingly common to find parents who purchase stocks and bonds that can be used to finance education for their children. It is always beneficial to instill good values in children and financial responsibility is one such value. When children are old enough to understand the use of money, especially when they are given some pocket money, they should be encouraged to keep some aside in their bank accounts for their education and future.