7 Reasons to Have a Savings Account for Social Gatherings

If you are not financially prepared, social engagements can leave your finances strained. When you plan and set aside funds for social engagements, you won't have to dip into your emergency fund, your day to day spending account or max out credit cards.
05/15/2014 05:35 pm ET Updated Jul 15, 2014

If you are over the age of 25, you will begin to notice a trend. In your circle of friends, your Facebook news feed will start to have more photos of engagement rings and birth announcements. We're talking weddings and baby showers galore. All this on top of your family get-togethers, networking obligations for work and the monthly socials with close friends.It's not uncommon for your dance card to be overflowing as you transition into your late twenties and early thirties. Keeping up appearances and showing support during a major life change is part of maintaining important relationships. But all those appearances start to add up. And they add up fast.

If you are not financially prepared, social engagements can leave your finances strained. When you plan and set aside funds for social engagements, you won't have to dip into your emergency fund, your day to day spending account or max out credit cards.

Here are seven reasons why you should have a social savings account.

1. Weddings
Everyone reaches an age where they will notice that more and more friends are getting married. And depending on how close you are with the newly engaged, you may find yourself a part of the wedding party.

Just being a wedding guest can get pretty pricey. But being part of a wedding party is on a whole other level. Not only will you, obviously, be attending the wedding with a gift in hand, but there are also the pre-wedding festivities. Typically, there's an engagement party, bridal or couples shower, bachelor and bachelorette parties and the wedding rehearsal.

Don't forget the bridesmaid or best man outfits and shoes you will purchase. And ladies, any special occasion means making a hair, makeup and manicure/pedicure appointments.

Costs of participating in a wedding can quickly add up and are filled with hidden costs. If you do not have a social savings in place, start one as soon you learn a friend or family member is engaged.

2. Housewarming & Going Away Parties
Within a circle of friends, two things will happen: they settle down and purchase a home. Or, they pack up and make a big move. Either occasion calls for a party.

There will be many housewarming parties and going away parties in your future. While the gifts for these parties are usually inexpensive (you can get away with a bottle of wine or gift card), the sheer frequency of these events will cause your wallet to gradually deflate.

In order to reign in spending, partner up with friends and get a group gift. Whenever possible, be frugal with the social spending. Check out Pinterest for great low cost DIY projects. Are you handy with knitting needles? Instead of purchasing a gift, knit a scarf or gloves if a friend is moving to a colder climate. You only pay for supplies.

3. Births
I dare you to find something more amazing than being part of your friends' and siblings lives as they start to have children. There's a lot of preparation involved in order to welcome a new baby. And that means one thing: baby showers.

But what happens when there is a second pregnancy? And possibly a third child on the way?

Even when welcoming the first born, you'll learn quickly that the easiest, budget friendly and most appreciated gift is cash. Instead of paying markup on expensive items like baby clothes and products, take money from your social account and transfer the funds directly into the parents account. Or transfer the funds into a designated savings or trust account for the baby's education.

4. Birthdays
It doesn't matter how busy you all may be. At least once a year per friend, there's a dinner, party, get together, or trip to Vegas. And don't forget mom's birthday, dad's birthday, sibling birthdays, niece and nephew birthdays. I'm sure I missed a birthday, as you probably will. But the point has been made.

First thing is first: sync your Facebook with your calendar of choice and keep track of important birthdays. Being aware of birthdays weeks or even months in advance, especially when there is a trip attached to it, will allow you to set aside money accordingly.

As far as gifts are concerned, again, the most budget-friendly and most appreciated gift is cash.

5. Networking Events and Conventions
A few times a year, your job may require you to travel. Your employer may cover some travel expenses, but there will be costs that you will have to pay out of pocket.

Don't miss out on a great networking opportunity or a chance to learn new job skills because the finances are thin. Upon accepting employment, ask if there are company events or retreats. Or, ask if some light travel for conferences will be required.

6. Group Vacations & Retreats
For those maintaining long-distance relationships of any kind, a group vacation, retreat or family reunion may be in order. If the event is held around the same time every year, this makes planning and saving so much easier.

Plan these group excursions during the non-peak travel season, being late fall to early spring, when airfare and accommodations are cheaper. Don't drain your social savings on one event.

7. Let's do lunch
From brunches to happy hour, seeing good friends when you can is a must. But a lunch here and a drink can easily spin your budget out of control.

Budget your outings as you would your finances. If you max out on weekly excursions, there's nothing wrong with declining an invite and rescheduling for another time.

Set up automatic transfer with your existing bank and watch your saving account grow. Also, there are plenty of apps and services, like Level Money and Smarty Pig, to put your spending in check and get your savings in order. Lastly, if you want an entirely separate account for social spending, check out online banks like Ally Bank and Simple

Destiny A. Lopez is a writer for MyBankTracker.com.

15 Ways To Save On Eating Out