Whether you're a beginning freelancer just starting out with a little bit of contracted at-home work or a self-employed business-person running a multi-person operation from your home, long term savings for your business and your household is a major part of ensuring your long term financial success. You may have read some of the back-and-forth on rates of savings for American consumers and debate on the best saving strategies. Here are some reasons why savvy work at home individuals like to build up long term savings.
- Health Savings Accounts - In recent years, the government has provided for specific savings accounts to be used for health emergencies. Building up these accounts is one way to handle the sky-high healthcare costs of today's America when huge premiums or lack of access to group coverage mean work at home moms and others have to pay more medical costs out of pocket.
- Other "Emergency" Accounts - Some work at home entrepreneurs take the health savings account idea a step further and apply it to emergency home repairs, emergency auto repair and other expected eventualities. You'll never know quite when you may need to pay several hundred dollars for emergency repairs on your vehicles, home or other assets, but with structured saving accounts, you'll be ready when the time comes.
- Interest and Gains - Long-term savings is also desirable from a financial perspective. At the very least, you can get some common interest with long term savings accounts, money market accounts, or certificates of deposit. Going a step further, you can take your long term savings and invest it in some of the less risky products that help your money beat inflation over the long term, leaving you with more money in your pocket in future years.
- Taxes - If you are a self-employed or contracted work at home mom, you will likely have to pay a large tax bill when you file your annual return. Having long term savings allows 1099 and self-employed individuals deal with a lump sum tax burden.
- Discipline - Building up long term savings builds financial discipline, and that's good for almost any household. It's even better for a small business, when good capital moves can mean the difference between survival and expansion, or going into the red.
Think about all of the above when you're considering long term financial strategies. It's true that conventional savings accounts don't often earn a lot of interest, but having money on hand can really be a financial lifesaver in lots of different situations, and the first step in long-term investing is building up capital through dedicated savings strategies. Even a little bit each week can form a good protective layer of capital for your business or household over time, for lots of work at home moms and others faced with long term decisions, the benefit of having fall-back money outweighs the hassle of initiating a savings plan.