Studies show that four in 10 adults in the U.S. would need to put an unexpected $400 expense on a credit card or would need to borrow money from family or friends to pay for it.
2. Save for Retirement
Another important reason to save money is your retirement. The sooner you start saving for retirement, the less you will have to save in the future.
3. Save for a Down Payment on a House
Save money for a down payment on a house. If you can save up 20% of the purchase price, you can avoid paying private mortgage insurance (PMI) and receive better interest rates on a home loan.
4. Save To Maximize Interest Rates
Where you save your money matters, too. Use a regular savings account, high-yield savings account, money market account, savings bond, or certificate of deposit (CD) to earn interest on your savings.
5. Save for a Vacation, Car, or Other Big Purchase
Your savings account isn't only for things you need—it can be for things you want, too.
6. Save for Irregular or Recurring Expenses
Sometimes, you know you'll have big expenses coming, even if you're not sure how much they'll be or when exactly they'll occur. To cover these, set up a sinking fund.
7. College Education
Don't neglect saving money for education, whether it's for yourself or your family. Higher education may improve career prospects, depending on the industry, but it comes at a cost.