A Rainy Day Account Can Save You Money
Everyone needs to save for a rainy day for those unexpected expenses that sneak up on us when we are not looking.
The foundation of any savings plan is to start with depositing enough money into your rainy day account.
This way of saving is intended to meet the cost of any unforeseen problem, such as needing a new television set or putting right something at home that the insurance will not cover for.
Getting small to medium sized loans, amounts up to $2,500 could be pricey.
It can cost $500 (or 20%) to borrow $2,500 over the course of a year through an unsecured loan from a major high street lender.
If you have a poor or non-existent credit record, it could cost substantially more.
But if you have some money ready, then you avoid having to borrow and the costs associated with loans.
Smaller amounts such as $200 can cost interest rates of up to 172% if you have to resort to doorstep lenders because you are not creditworthy enough for a mainstream bank loan.
And do not even think about unlicensed loan sharks.
Building up your saving so you do not need expensive borrowings for household emergencies is not rocket science.
Instead getting that money together needs discipline.
You cannot save and spend at the same time.
You have to accept that if you are to build up a worthwhile cash cushion, you will have to make some sacrifices.
Saving means that foregoing instant gratification.
Do not make the big money wasting mistake of putting money away in a savings account while continuing to finance your previous level of expenditure on an ultra high interest credit card or costly high cost overdraft.
Here are a few (almost) painless ways of saving if you are starting from scratch.
The foundation of any savings plan is to start with depositing enough money into your rainy day account.
This way of saving is intended to meet the cost of any unforeseen problem, such as needing a new television set or putting right something at home that the insurance will not cover for.
Getting small to medium sized loans, amounts up to $2,500 could be pricey.
It can cost $500 (or 20%) to borrow $2,500 over the course of a year through an unsecured loan from a major high street lender.
If you have a poor or non-existent credit record, it could cost substantially more.
But if you have some money ready, then you avoid having to borrow and the costs associated with loans.
Smaller amounts such as $200 can cost interest rates of up to 172% if you have to resort to doorstep lenders because you are not creditworthy enough for a mainstream bank loan.
And do not even think about unlicensed loan sharks.
Building up your saving so you do not need expensive borrowings for household emergencies is not rocket science.
Instead getting that money together needs discipline.
You cannot save and spend at the same time.
You have to accept that if you are to build up a worthwhile cash cushion, you will have to make some sacrifices.
Saving means that foregoing instant gratification.
Do not make the big money wasting mistake of putting money away in a savings account while continuing to finance your previous level of expenditure on an ultra high interest credit card or costly high cost overdraft.
Here are a few (almost) painless ways of saving if you are starting from scratch.
Source...