Why do I treat my savings like a bill to pay?

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There are a few simple reasons why I make sure I’m saving money.


Key points

  • My savings are a priority in my monthly budget.
  • I treat my savings with the same importance that I treat any bill.
  • I need savings for a secure future, including retirement and emergencies.

When I created the budget I live by, I first made a list of my essential bills. That way, I can be sure I’m allocating money to cover them before I distribute the remaining funds to discretionary spending.

My essential bills include obligations to creditors, such as my monthly mortgage payment. But they also include sending money to savings banks. In fact, I treat investing in retirement accounts, as well as various other savings accounts (including my emergency fund, vacation fund, and home repair fund), as bills I need to pay that have the same priority level as my obligations to others.

This is why.

Saving is really essential

The main reason I consider investing in savings accounts to be a crucial monthly expense is because not saving money can lead to a number of financial problems.

Now, paying your bills is important to avoid ruining your credit and facing financial disaster, like foreclosure or eviction. But for me, it is equally essential to save money to avoid another type of financial crisis.

Without savings, for example, it would be very difficult to live as a retiree: Social Security benefits replace only about 40% of pre-retirement income (not the 80% or 90% that most experts recommend). Without savings, a home repair bill, disaster, or trip could also lead to debt, which can cause long-term financial hardship.

Since I believe my financial stability depends on having lots of money saved, just as it depends on paying all my other bills, I see no reason to treat the investments in my retirement and other savings accounts any differently than my mortgage, on a monthly basis. phone bill, utilities and other obligations that I am 100% sure to meet.

Treating savings like a mandatory bill gives it the priority it deserves

The other big reason I look at savings as a bill to pay is because by doing so I can ensure that I’m actually achieving my financial goals and instead not spending money on things I regret.

I’ve determined exactly how much I need to invest each month to achieve different financial goals, like making sure my retirement savings are at the desired size before my preferred retirement date and making sure I have money for major home repairs should they come up. . Since I know what I need to invest, I budget that amount as one of my top priorities.

By paying myself first, along with the outside companies I have obligations to, I don’t end up short-doing myself because too much money goes elsewhere, leaving me with too little to meet my savings goals. I work the rest of my budget around my monthly savings goals to make sure I can set up automatic payments to my savings accounts, so I can enjoy spending what’s left without worrying that I’m doing the wrong thing. with my money

Treating my savings like a bill to pay has ensured that I consistently invest the money I need for many years, and is something I think everyone should consider doing.

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