In Charge Debt Solutions explains that saving money is important for a number of reasons; primarily because it creates an emergency cushion for any sudden and unexpected financial crises. Saving money provides financial security during uncertain times, such as serious illness, relocation of work or home, emergency car repairs or replacement, company downsizing, job loss or long-term unemployment.Know More
A solid savings account makes daily-living-expenses more affordable. In the event of a layoff, death in the family or any number of emergencies that can arise, both individuals and families depend on their savings to cover monthly bills and extra, unexpected expenses. According to Forbes, a credit card should only be used if the balance can be paid off monthly; credit is not to cover expenses that are beyond one's means.
Saving money also helps to improve the quality of life overall and to pay for extra, luxurious items. A new house or a new car often requires a mortgage; and, a large savings account can help buyers make a down payment, pay less out of pocket, secure a better credit score and qualify for a lower interest rate. Plus well-established bank accounts and saving bonds can accrue interest over the years.
Saving money helps individuals plan for the future, cover college expenses, plan dream weddings and replace employment income during retirement years, with less reliance on Social Security payouts. In Charge Debt Solutions notes that life expectancy is increasing; and, a strong savings account means seniors can live more comfortably for more years, without worrying about how to pay for medical care, rent and other long-term costs.Learn more about Financial Planning
Ways to help family members in financial need include giving them money, making them loans, co-signing on loans and paying some of their bills. Although bringing money into a family relationship can be awkward, sometimes helping a family member financially is the right thing to do. However, as Investopedia warns, it is important to think through what help is feasible before making any offers.Full Answer >
Catch-up 401(k) contributions for people over 50 are treated the same was as other employee contributions to the plan; the money is not included in taxable income for the year, according to Zacks.com. However, if a catch-up contribution is made to a Roth 401(k) plan, it won't be pre-tax.Full Answer >
There are contribution limits on Individual Retirement Accounts to limit the amount of money a taxpayer can put into an IRA to use as a tax shelter. The key advantage of an IRA account is not having to pay taxes on retirement savings for an extended period of time.Full Answer >
Employees can contribute to a SIMPLE IRA by reducing their salaries and transferring the money into the IRA. After an employee contribution is made, the employer has to make either a non-elective contribution or a contribution that matches the employee's.Full Answer >