Many of us from a very young age have always been told to make sure that we put some money away for when we will need it the most. It is commonly referred to as ‘rainy day money’ and it is money that is always there for you in the event of some kind of financial emergency. We never really know what lies around the next corner with regards to our health or family so it makes perfect sense that we would be saving money all the time so that the cash is there when we need it. It offers a kind of buffer in our lives and provides us with peace of mind that in the event that we need money quickly, we can get our hands on it.
This is why many Australians invest in term deposits over various periods of time. The more popular options are one-year, three-year and five-year deposits and you are guaranteed an agreed interest rate over that period as long as you leave the money there. It is useful to know exactly how much money that you will be paid at the end of the period and so this can act as your rainy day fund. If you have never really thought about getting into this mindset and saving a few hundred dollars every single month then the following are just some of the reasons why you need to.
- It is there for difficult times – The hope is that you will never find yourself in a situation where you need to get hold of money quickly but your rainy day fund in the form of a term deposit will be there waiting for you when you need it the most. What you’re doing is taking out some kind of insurance, so that if you find yourself in a difficult financial situation then you have already created the solution.
- It stops us from borrowing – It can be very tempting to turn to various financial institutions to get us out of a difficult spot and if we need to get hold of money quickly then these same lenders can charge us extortionately high interest rates. In order to stop you from turning to these dubious lenders, you always have your term deposit money to consider.
- It lowers your anxiety levels – Just knowing that there is money tucked away in a term deposit any new money every single year is sufficient to keep your stress and anxiety levels at a controllable level. Many Australians worry about their financial situation every single day of the week and it is causing us to become ill. This is peace of mind that we all need to have and so start putting away some money away today in a term deposit account.
Believe me when I tell you that your rainy day will come eventually and so this way, you will be properly prepared and ready to handle anything that comes your way financially. It is a great habit to get yourself into and it is one that will benefit you throughout your life.