Skip to content

Please Don’t Try to Live Without Savings Accounts


What do you think of when you hear the words, “personal finance”? Increasing your income, decreasing your expenses, couponing, investing, retirement planning, or maybe even passive income. But, what about savings accounts? Why don’t we ever think first about our savings when referring to personal finance? It’s quite simple actually. Saving money is boring. It hardly ever serves a purpose (most of the time money just sits in an account) and you have no cool toys to show for all of your hard efforts.

Boring, yes. But there is a point.

I’m sure you’ll all heard of the term “emergency fund”. Having a fund for unknown emergencies sounds like a simple concept. All there is to do is set aside money for the unforseen expenses in the future. You or your spouse (or both) might lose your job, maybe your water heater goes out, or perhaps your timing belt snaps on your car and the engine needs a complete overhaul. Whatever the case, if you don’t have cash stashed away, then what do you do?

I’d say that most people quickly grab the credit card and give it a hefty swipe. Then before they know it, they’re spending the next 9 months paying off the card, and have paid hundreds of dollars in interest. All because they didn’t have an emergency fund set up.

Earn Some Interest, But Keep It Accessible

When emergencies happen, you don’t want your money tied up somewhere. After all, you most likely need it now! I suggest that you look into some easy access savings accounts. This way you can get your money in a matter of minutes, rather than waiting for days or even weeks for your cash to come in.

I know that it’s tough to put your money into an account that’s not bearing a ton of interest, but it’s just a necessary and responsible thing to do. Let’s say that instead of putting your money into a savings account, you invest it in the market through eTrade. You figure that if something happens, you can quickly sell some shares and get at your money. But, it’s actually not that simple. First of all, by selling your shares, you are paying a transaction fee (which is typically $10 per group of shares). Then, once your money becomes available from the trade (which could take a day or two), you still need to transfer the funds into your bank account to make the withdrawl! Overall, this could easily take 3 or 4 days. If you are living in a house without heat, this is definitely a problem.

Others decide to invest their extra money in real estate. While I do love the idea of owning real estate, it’s a terrible place to put your savings! How long do you think it typically takes to sell a house? If I had to guess (and it is purely a guess), I’d say anywhere from 3 weeks to a year. Obviously, this would not be a great place to put your emergency fund. The only way to get your money out fairly quickly would be to sell your house at a rock bottom price. And, if that’s the case, then you were probably better off just earning 1% in a savings account!

Do you currently have a savings account for your future emergencies?



My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Thanks for the article, but I can’t say that saving money is boring. It’s important to find your own right motivation, then it will be quite interesting. There was a time when I didn’t think about saving money at all, and all the time I had different reasons for not doing that. But then I learned that setting goals can really help me to manage my budget and save some cash for what I want or just for a rainy day. I feel much more financially secured because I have savings account, I am confident about tommorow’s day and in case any unexpected problem will arrive I know that I can solve it.

    • It is a great feeling to know that you have a chunk of change to back you up in the event of a job loss or a busted water heater. Thanks for the comment!

  2. I’ll take boring any day over the “excitement” of not having savings to help us out of a tough situation!

    • Very well put Skrprune!

Comments are closed for this article!

Related posts