Wealthy people have a great habit of saving and they are aware of the importance of saving money.
One of the world’s richest man, Warren Buffett is not fond of buying expensive things. He values money and believes in saving it.
“You must learn to save first and spend afterwards.” – John Poole
You don’t have to be thrifty for saving money. You can cut down your luxury spending. You should enjoy the journey of saving and investing. The goal here is to earn money by saving money.
If you have the insight for why saving plays a crucial role in our life, you will start saving willingly.
But why is saving money important? Following are seven reasons that you might consider to start saving money:
The Importance of Saving Money for Your Future
1. For stress-free retirement
Everyone wants to retire at some age in life. To live happily and stress-free at that time, you need to start saving today.
If you start planning your retirement fund at an early age, you can retire whenever you wish.
Savings are also important to maintain your lifestyle at that time when your bank account will stop getting credited every month.
Don’t wait to learn about retirement plan in your old age. It is crucial to know the types of retirement plans and to settle for what goes according to your income beforehand itself.
2. Save for better education
A good education is an investment for a better future. Each year more people end up at various schools to earn their masters or doctorate degrees.
If you have goals of reaching some college or university, you will also need huge funds. So, start saving money today for your dream.
Even if you plan to take the student loan, prepaying some part in advance will save you from accumulating hefty interests. Hence, saving for the future education of yourself or might be your next generation seems to be smart enough.
3. Save your pocket for an emergency cushion
The future is full of uncertainties. You never know which unexpected and emergency expenditure will come next knocking at your door. An accident or a sudden hospitalization of any family member, a job loss, a broken roof, etc.
That’s where the importance of saving money comes in. If you are prepared beforehand, it will be much less stressful in terms of financial condition.
According to a study, 62% of Americans do not have funds for unexpected conditions.
You can start today by putting aside a small amount from each pay cheque. You should have an emergency fund of about four to six months of your expense.
Also, a good insurance plan is a must to help you survive unexpected events.
Read also: 4 Ways for a Family to Save Money
4. For planned risks
Another good reason to save money is that you can take the calculated risk in life.
It gives you freedom of choice. Whether it is leaving your job and starting a new business, leaving work and going back to school to switch careers or investing in someone else’s business, having money in hand gives you confidence and path to move forward.
You might get an opportunity to invest in a big project or idea. Having sufficient saving gives you the chance to grab that life turning opportunity.
5. For avoiding impulsive spending habits
“Do not save what is left after spending; instead spend what is left after saving.”- Warren Buffett.
Having a habit of saving will enhance your life by not letting you spend money on reckless things and accumulating it for major expenses like buying a new car or preparing for the wedding, etc.
Make up your mind on saving some amount from your income as soon as you get it in your savings account.
You have to make sure of being disciplined and not touch it until when you are in extreme need.
6. For future investments
Being aware of the importance of saving money also means investing.
Having enough money to invest is adding a source of income. It helps to meet your personal financial goals.
You can invest in stocks, real estate, mutual funds, bonds, etc. These methods will offer more return than just saving.
A saving account provides you meager interest which couldn’t even pace up with inflation.
Other investment options give you a good return but they are risky. Before investing you should get all your investment query solved.
Read also: Real Estate as an Income Plan for Retirement
7. For leading a debt-free life
Some expenses in life are such which you just can’t avoid!
Paying children education expense, loss in business etc, are inescapable even if you have to take loans. Financial crisis can lead to a number of other issues like anxiety, insomnia, and even heart problems.
So, saving money is crucial for having peace of mind. When you know you have your financial needs under control, you tend to enjoy life without worrying.
Therefore, saving is an important tool that can help you to have financial security for the future. You should start looking for methods of savings from now itself.
It makes saving easier if you have a clear goal or purpose for the money that you are saving.
Howbeit, remember, saving doesn’t mean cutting down your needed expenses dreadfully. Rather, avoid such costs which are not really important like reducing the number of dine-outs or movies theatre visits, and always keep the importance of saving money in mind.
About The Author
Clara Decker is the marketing manager at CouponsMonk.com, deals and discounts provider company. She is passionate about money savings, investment and finance industry. In addition, Clara also supports non-profit agencies that provide healthcare solutions to handicapped and disabled people.