1. Develop a savings habit
It’s easy to recklessly spend cash. Why do you think candy bars are located at checkouts and not in the back of the store? Impulse shopping is very real. Having a savings account will keep your cash out of hands reach and encourage a sense of financial security. A savings account is the first step in becoming more financially conscious, and will help you discover the importance of budgeting your money to continue building your savings. All of this will help guide you toward your future financial endeavors.
2. Gain Interest
Why wouldn’t you want to earn free money? Savings accounts pay interest on all your deposits. Although it can appear minimal, the longer you keep your money in a savings account the more interest you will build over time. The more money you end up saving in an account will create new opportunities you might not have even considered beforehand. For example, purchasing a home without a percentage down is very unlikely. By putting that money in a savings account, you’re keeping it safe while also acquiring a little extra cash for your future down payment.
3. To build an emergency fund
Let’s get real—life happens. Whether you’ve gotten into a fender bender or lost your job, it is important to have a several months of living expenses saved up before these situations present themselves. Having a savings account won’t damper your financial plan and will allow you to live comfortably until you get back on your feet.
4. To build a positive relationship with a credit union for future lending purposes
If you are ever thinking about turning a great idea into an investment, then you are going to need financial support from a financial institution. Building a relationship early on will help give you leverage when the time comes. After all, having a savings account says a lot more about your stability and discipline to a loan representative.
5. Safe place to store money
Keeping your money in a savings account is a lot safer than storing it under your mattress, or in the back of your freezer. Money can easily get lost or stolen if it is not properly stored. The money you deposit in a savings account with Collins Community Credit Union is protected by the National Credit Union Administration (NCUA). This means the NCUA is responsible for covering all your deposits if the credit union ever fails. Unfortunately, the world isn’t perfect, and people get mugged, their homes get broken into, or they are shorted in some way, but no one has ever lost their money on NCUA-insured deposits. Don’t take the risk, it’s not worth it.