6 Things That Could Destroy Your Savings Account

Money management is always tough. You know that you should be putting money aside every month, but it’s tempting to spend it on going out or buying stuff for yourself instead. Many of us fell into that trap when we were younger, with your paycheck disappearing a few days after it landed in your bank account. But hopefully, you’ve got that out of your system now and you’re starting to realize the benefit of financial security. It gives you more freedom to go out and do things without having to worry about it, and if you end up in a bad situation, you’ve got some savings there to draw on.

Unfortunately, that’s only one part of the equation. Even if you’ve got the best of intentions and you’re putting away money every month, there are still things that could stop you from being financially stable. But as long as you’re prepared for any financial challenges that you might face, you can overcome them and manage your money well. These are some of the things that might upset your savings plan in the future.

Job Loss

It goes without saying that you can’t save money if you’re not earning any, so losing your job is the first thing that you need to watch out for. When a company hits hard times and they need to start making cutbacks, it’s going to be the weak links that are let go first. That’s why it’s important that you make sure that you don’t fall into that camp. If you want to make sure that you don’t lose your job, you need to make yourself valued. Work hard and take the initiative to do things without always needing guidance for your boss. It’s also important that you boast about how good you are. That doesn’t mean you should walk around the office telling everybody how great you are, but don’t be modest and make sure that you own your successes. If you can show your boss that you’re an important part of the company that they can’t do without, your job will be safer.

Unfortunately, your job is never going to be completely safe because your company could fold entirely. If you’ve got a healthy savings account, you’ve got a bit of breathing room while you find another job. But the key is to start looking for other opportunities while you’re still in work. Make sure that you’re networking well so you can call in some favors if you’re looking for work and always make an effort to improve your skills so you’re more employable.

Injury is another big cause of job loss and it puts people in a difficult situation because it can hit you out of nowhere. If you get injured badly, you might be out of work for a long time and your savings account will slowly empty over the months. The good news is, there are ways that you can get financial help in these situations. There are some great auto accident lawyers for the injured, so if you were involved in a road traffic accident and you can’t work, you should make a compensation claim. That money will come in very handy until you’re well enough to get back into work again. If you were injured at work because health and safety wasn’t being followed properly, you might even be able to file a claim against the company. Having that extra money will make it a lot easier to manage your money while you recover and get back into work.

Student Loans

Going to college is a bit of a double edged sword when it comes to saving money. Having that degree will help you to get a higher paying job so you have got more money coming in each month. The bad news is, you’ll be saddled with massive student loans so those extra earnings probably aren’t always going into your savings, they’re being eaten up by loan repayments. Most people just accept that they’ll have to deal with the repayments until the debt is cleared and then they’ll be able to start saving more money. But if you take action and try to get rid of those debts a lot quicker, you’ll find it so much easier to put money away in a savings account.

Divorce

Divorce is something that people don’t think about until it happens. When your marriage is going great, you’re probably not thinking about how you’re going to protect your money if it all breaks down because you never think it’s going to happen. But sometimes, you’ve got to be realistic and consider what you would do if your marriage ended. The cost of the actual divorce itself is going to be high and you might also lose a lot of money if you have to split all of your assets down the middle. It’s always a good idea to have a prenuptial agreement in place. This legal document outlines who owns which assets and how they will be divided up after the divorce. It’s not a very optimistic thing to do, but if you want to be realistic about things, it will make the divorce process so much simpler and protect your money if things do break down.

Car Repairs

Your car is a necessity and when it breaks down, you’ll have to fix it right away, otherwise, you won’t have any way of getting around. The problem is, mechanics don’t come cheap and if you need serious repairs, they can easily drain your savings account. If you don’t have anything in your savings account, then you will end up having to borrow money on credit cards and that makes it even harder to save money. The good news is, there are a couple of ways to avoid serious car repairs. Keeping up with basic maintenance is the most important thing. If you’re not changing the oil and lubricating the engine properly, the parts will get worn down a lot quicker and they’re more likely to break. You also need to make sure that you’re dealing with small issues when they come up. If your check engine light comes on, don’t just ignore it and hope that it’ll go away because you don’t want to spend the money at the mechanic. It won’t go away, it’ll get worse and you might end up paying more money to fix it in the end. It’s a lot cheaper to just sort the problem right away.

Home Repairs

This one isn’t too much of a problem if you’re renting because it’s up to your landlord to pay for any repairs that need doing. But if you’re lucky enough to be able to afford your own home, you’ve got to be prepared for the costs that come along with that. You probably didn’t think about just how much money it costs to keep a house in good condition, especially if it’s an older house. A broken boiler or a leaking roof can easily empty your entire savings account if you’re not careful, so you’ve got to stay on top of home repairs. Just like with cars, the easiest way to spend less on home repairs is to deal with small problems as and when they come up. You should also get somebody in to look at the plumbing once a year or so, they’ll be able to spot any potential issues and sort them out before they become a lot more expensive.

Credit Card Debt

In your younger days when you weren’t really worried about financial security, you might have viewed credit cards as an endless stream of free money. But they aren’t and that mentality will come back to bite you. If you’ve got a massive credit card debt and you can only afford to pay the minimum repayments each month, you’re only really paying the interest and the debt isn’t going anywhere. In that situation, all of the money that you could be putting into savings is going straight down the drain.

The only way to get around that is to clear the debt as quickly as possible. If you’ve got a lot of different credit cards, you should speak to a debt consolidation company. By combining it all into one debt, you’ll reduce the amount of interest you’re paying by quite a bit, which makes it easier to pay off. Then you need to cut back on your spending wherever you can and put all of that extra money into paying off the debt. The faster you can clear it, the easier it will be to start putting money aside in your savings account so you’re prepared for anything that life throws at you.

A lot of people make the mistake of thinking that saving money is just about discipline. It’s true that you do need to make sure that you’re always putting money aside each month, but even when you’re doing that, one of these things could be eating into those savings. But if you’re prepared for the hurdles, you can easily overcome them.