Great post about why you should save – even if you need to put $10,000 in the bank to earn a couple of dollars in interest per year. Just think of it as a debt insurance policy, rather than an investment.
With interest rates staying at all time lows, we may be tempted to look at saving as a no-win situation. Monies deposited just aren’t accumulating any interest and with an annual inflation rate around 2%, aren’t we actually losing money on our savings?
The short answer is yes, but a more prudent answer lies with the interest rate we pay on credit cards and loans. If we have no savings at all (or very little), an unexpected expense like a refrigerator breaking down ends up on our credit card. We end up paying interest on a credit card balance, and add yet another bill (or a higher bill) to our monthly cycle.
This is where we can win simply by having a little bit of emergency savings set aside. Saving just one dollar each day would accumulate $365.00 each year and over $3,000 in ten years. That is if we don’t use it for…
View original post 437 more words