Saving any amount of money in this climate can feel like an uphill battle. There are so many bills, expenses, and everyday living costs to get through before ‘saving money’ becomes any kind of priority.
But saving is important.
According to Let’s Reach Success, there are seven main reasons for saving money. You should look at these with some thought and attempt to make more savings with your pay cheque, as even a little amount saved away each week can help.
The first reason you should save money is for a stress-free retirement, so here we are considering long-term plans. It is hard to look so far into the future but you must do so because you don’t want to end up in twenty years with nothing to your name. It is better to stay now than later down the line because every cent counts!
The second reason Let’s Reach Success says you should save money is for better education, and they say, “Even if you plan to take the student loan, prepaying some part in advance will save you from accumulating hefty interests. Hence, saving for your future education of yourself or what might be your next generation seems to be smart enough.” Many people have several careers in a lifetime – what if you need extra training to get ahead? Having some amount put by will boost your potential.
A third reason you should save it for an emergency buffer, is in case of sudden expenses, which goes without saying. A fourth reason is for planned risks, such as if you plan to change careers or wish to go back to school, as you will need the money to fall back on.
The fifth reason it is important to save money is to avoid impulsive spending habits. It will help you to be more disciplined with your money. By seeing your money slowly accumulate, you will be less likely to blow it all, as it means a lot more to you.
A sixth reason is for future investment because you may find some opportunity to invest in something and these changes can come along suddenly. The final reason is of course so you can live a debt-free life. Personal loans provider Wonga.co.za suggests categorizing debt into ‘good debt’ and ‘bad debt.’
Good debt would be regarded as school fees, car expenses, or something that would ultimately boost your possibilities in the long run. Bad debt is debt that is not needed, a waste, or excessive in some way, like a holiday or shopping trip. By having savings in place, you can offset your debt and live in the black, not the red. You can weigh up the risk of a loan or debt by looking at the overall impact it makes on your future. E.g. taking out a loan for home improvements may boost your property value, which could be better in the future. None of us want to be swimming in debt, but too many of us are, so saving could help this situation.
Overall, saving money is important to protect yourself and your family, as you never know what is around the corner. Start now – and start small if you can, and create a direct debit each month, which automatically sends money over to a dedicated savings account.