With the average American now holding as much as $8,863 in their savings accounts, we’re finally getting back to grips with budgeting in the mainstream. Unfortunately, despite the so-called financial health of this positive habit, there is also an underlying issue that’s quickly making itself known, and it comes in the form of guilt regarding savings-based purchases. After all, we need money in the bank, and if you’re spending your savings that you’re dwindling that all-important stockpile. Or are you?
Of course, aimlessly spending hard-earned savings on frivolous purchases is a no-go. But, if you’re stopping yourself from spending savings for even crucial expenditure, then it might be time to think again. After all, having untouchable money in your bank is as bad as having no savings at all. The question is, how exactly can you determine whether or not dipping into savings is the right move?
Consider your intention for saving
Very few of us embark on a saving stockpile without having ultimate goals in mind. Returning to these goals before a withdrawal is therefore a fantastic way to ensure saving-based spending is worthwhile. For instance, you don’t need to feel guilty about house-based expenses if you set money aside for house renovations in the first place. Equally, if you saved for the sake of better vacations, then there should be no shame in taking money out for vacay spending. However, if you put money aside for emergencies and are considering taking some out for a vacation rental, then you’re probably going to want to think again.
The urgency of an expense
You’ll also want to consider the urgency of the expense that you’re facing. For example, even if it falls outside of your intended remit, it would be senseless to let bills escalate in light of a broken boiler when you do technically have the money to replace it. Equally, issues like the immediate need for a car accident attorney to avoid potentially hefty payouts in the wake of an accident, or even the need to clear credit card debts before debt collectors make a visit, are generally justifiable reasons to dip in. Even if you prefer to do this on an I.O.U. basis, you certainly shouldn’t hesitate if an urgent expense is needed before you’d ever be able to find the money otherwise.
It’s also worth considering whether there are any alternatives for managing a situation. If small lifestyle changes like extra work hours are all it takes to cover an added expense, then there’s certainly no reason why you should rock the savings boat. However, if the alternative is an escalating or unfavorable financial pitfall like unavoidable debt or bankruptcy, then this is precisely what your savings are there for, even if it wasn’t what you had in mind when you initially set that money aside.
Being skeptical of savings-based spending is invaluable, but knowing when to dip in is also the only viable way to ensure that your efforts here are worthwhile in the first place.
Be safe out there.
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