Welcome to this blog on the benefits of saving money!
Throughout life, mostly teenage and adult years, the majority of thoughts that come to our head are buying and spending. It’s about how many shoes you have, rather than how much money you saved waiting later to buy it. It’s about what designer clothes you buy, rather than the fortune you save by buying other nice clothes. And, it’s about what cars you drive, rather than the money you saved by buying a safer and reliable car. Buying these things may lead to happiness for a certain amount of time, but you will probably find that smile disappear when you glance at the numbers.
We all know that saving money is important and necessary to be able to live comfortably in life. However, we get so engrossed in showing off and satisfying our wants that we forget about what the future brings in terms of finances. What happens in the future is a result of your actions in the present. So, what can you do to help so that your future is brighter, more successful, and happier?
Don’t get me wrong- I am not encouraging to stop buying things that you want. I am only advising you to stop buying the things that are unnecessary. So by all means, if you really wanted a new phone after having an old mobile for the past five years, go ahead! I highly recommend checking out: The No-Spend Challenge Guide: How to Stop Spending Money Impulsively, Pay off Debt Fast, & Make Your Finances Fit Your Dreams. You’d be surprised at how much you save by not buying inessential items anymore!
It is always important to be prepared for the future, as one can never predict what the future will bring. So, one thing you can start doing to be prepared is to start saving money. This blog is all about the benefits of saving money, and it is perfect for all ages, no matter how young or old you are. In fact, the earlier you start saving money, the better it is. Understanding the benefits of saving money is crucial to be encouraged to actually start saving money, so read on!
1. Helps in emergencies
As said in the introduction, no one can predict what the future has in store for each and every one of us. It may bring us lots of happiness, smiles and laughter, or the exact opposite. While no one wants the future to be sad and gloomy because of different situations, the least we can do is be prepared for them.
Money does not solve all problems, but it may help some situations. For example, some of these dilemmas include job loss and medical emergencies. In order to be able to bounce back from these problems, money will be a huge help.
“From a family emergency that requires you to fly across the country, to less emotional emergencies like a broken down car, having a decent amount of money saved up keeps you from adding financial stress to the pile. Seriously, money is the last thing you need to be worrying about in an emergency. So do your future-self a favor and save up an emergency fund. Hopefully, you’ll never need to use it, but if you do, you’ll be beyond grateful it’s there.” (bethebudget.com)
2. Prepares for major life events
Disregarding critical emergencies in the last topic, life also brings major life events. For example, getting married, buying a house, raising a child, and much more. Getting married is definitely very costly, so is buying a house and raising a child. According to a 2017 report from the U.S. Department of Agriculture, the average cost of raising a child from birth through age 17 is $233,610. That sure is a lot of money!
When life brings these beautiful moments, money is something that can make it even more enjoyable. So, start saving right now so that you can make those moments and memories full of more happiness and smiles!
3. Gives financial freedom and independence
Unless you’re happy to rely on the Bank of Mum and Dad for handouts forever (and they may be less happy than you about this) you’re going to have to stand on your own two feet financially eventually. Building up a savings nest egg can help you achieve this aim, as you could use these funds to help get on the property ladder, or to pay off student debts sooner.
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Accumulated savings gives one peace of mind and helps him or her to enjoy financial freedom. There is a comfort in one knowing that there is a buffer that can be used if funds are needed urgently. This is in contrast to those who live from one salary to the next. They immediately become stuck financially if any unexpected expense arises.
homebusinessmag.com
One of the best parts of being an adult is the independence and freedom to do what you want, when you want. (Within the confines of the law, of course)
But the less you save, and the more debt you accrue, the less independence you will have. So, if you want to be financially independent and unshackled, you need to beef up your savings.
bethebudget.com
4. Prepares for retirement
There comes a certain point in life where old age takes place and you no longer have to work. Everyone expects retirement to be easy, as you don’t have the stress of your career and the busy days working 24/7. But, what about your own personal life? After you retire, money is a necessity in order to live comfortably according to your own means. With no income from a job, there needs to be another source of money. And that comes from savings.
There are long-term benefits of saving. One of them is having funds available for retirement. Many retirees who rely on a pension usually do not have enough to cater to all their needs. Making a habit of saving a small portion of one’s income over several years can accumulate into a substantial amount of retirement funds. This will make retirement much more comfortable.
homebusinessmag.com
5. Helps advance education
With children becoming older year by year, college comes closer and closer. The price for not only private, but also public education is rising yearly! Education is a must, especially in a world like this. By having a good education, one has better chances of getting better job offers, leading to more success in the future. But, if you can’t pay for education now, then that may lead to fewer opportunities in the future.
They say: education is the key to success. It would be best if you had it to win considerable benefits in jobs and other life factors. These days, middle, high schools, and colleges are reasonably expensive, and you need to be prepared. Even after winning a contract with a well-paying company in town, you may have a feeling of acquiring more knowledge, and therefore, you must start saving for it. Additionally, when married, you should start thinking about how your children will attend school. Set aside an account to save for your child’s education.
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6. Less stress
There’s nothing like financial stress to keep you up at night; or worse, wake you up in a cold sweat. (If you’ve ever experienced it, you know how unsettling that feeling can be.)
The good news is that there’s a great way to eliminate financial stress… just have more money.
You might be thinking, “Umm…duh!”, but it’s the truth. You see, everybody wants more money, yet very few people work hard to save it up. And, unless you win the lottery–which is beyond unlikely–the only way to have more money is to save it over time. It’s as simple as that.
Let me put it this way, would you rather pay your bills and have $20,000 in savings? Or, would you prefer to pay your bills and with $0 in savings?
I’m not a doctor, but I’m pretty sure the $20,000 option would be less stressful.
bethebudget.com
7. Be able to buy necessary purchases
It is important to understand the difference between wants and needs in life. Clothes are necessary, but is that $2000 Gucci purse really necessary? Buying a house is necessary, but not having a pool in the backyard. Having a car for transportation is very handy, but not owning a Ferrari just for fun drives. When you save money, you will be able to buy the things that are essential in your life. So, start saving money now so that you can buy the essential things later on!
8. Be able to take risks
The more money you have, the less risky your financial situation will become.
For instance, if you have $10,000 to your name, and you invest $6,000 to start your own business, you just risked 60% of your net worth. Whereas, if you save and invest until your net worth crests one-million dollars, then spend $60,000 to start a company, you only risked 6% of your net worth.
Plus, when you only invest 6% of your net worth, it’s pretty likely you will make up for that in interest, alone, over the next year.
Saving and investing your money minimizes your financial risk. Plain and simple.
bethebudget.com
9. Personal enjoyment
While money does not buy happiness, it does buy things which we want, which could give us temporary happiness. It’s still happiness though! So, by saving money, you can be able to buy things which you want- like that comfortable sweatshirt you saw at the mall recently!
Additionally, many people think you have to make a choice between saving money and having fun, but this is a poisonous mentality. In fact, fun is a critical part of personal finance, and it is essential for your financial and physical well-being.
Truthfully, you should always set a little money aside for enjoyment. And when you have savings, you can do this guilt-free, and without any worry that you are harming your financial future.
Once again, saving money gives you the freedom to do what you want to do. And sometimes that means having a little fun.
bethebudget.com
10. Helps others
Do you know what happens when you save money wisely, and invest intelligently? Your money grows. And when your money grows, your opportunity to help others financially grows with it.
Consider this: if you give 10% of every dollar you earn to charity, or your local church, and you don’t have any savings or investments, your ability to give is limited by your annual salary. In contrast, if you save and invest your money, your ability to give will grow exponentially with compound interest.
Remember, money is just a tool you can use to accomplish your goals. And if your goal is to help others as much as possible, you need to be saving and investing your money consistently.
Can you imagine all the people you could help with the interest earned on $10 million?
bethebudget.com
The Takeaway
As seen in the topics above, saving money is not only beneficial to yourself, but as well as others. Saving money can be hard, but once you start, it’ll become easier to get the hang of it. And, once you do, you’ll be saving much more than you ever could have imagined!
Of course, saving money does not mean to stop purchasing necessary items. Nobody should ever save money by not buying things they need. The money that you saved should come from money that was not used on useless items. No matter how rich one is, it is always a good habit to start saving money for not only the reasons above, but more.
Check out this eye-opening video on why saving money is so underrated!
As a recap, the benefits of saving money in this article include:
- Helps in emergencies
- Prepares for major life events
- Give financial freedom and independence
- Prepares for retirement
- Helps advance education
- Less stress
- Be able to buy necessary purchases
- Be able to take risks
- Personal enjoyment
- Helps others
The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind. – T.T. Munger
Check out our other posts on this topic in our saving money category.
Stay tuned for a new post on simple things you can do to save money! So, if you know that you recently bought something unnecessary, what are you waiting for? Go return it! Until then, good luck and have a fun time saving money!