Five Vital Reasons To Save Money
It doesn’t matter your religion, race, or society; money is a universal legal tender for business transactions. Thus, it plays a huge influence in our lives right from birth to the time we die. From purchasing groceries, clothes, and household appliances, traveling to different cities, and studying in college, money determines the quality of life people live.
Because of these varying needs, people work every day to make money. Whether you are a 9-5 worker or an entrepreneur, you need money to survive and live a good life, and if possible, a luxurious life. While it is the prevalent idea that you make or earn money to spend on your needs and wants, it is not the only use of money.
Money shouldn’t be spent alone after it is made. It should also be Saved. Savings means keeping money for a short or long period for a particular purpose. Savings also refers to setting aside money for future purchases or emergencies.
Like in money spending, people save money for different purposes, depending on their perceived needs or want. These purposes serve as reasons that motivate a person to keep a part of their income away without touching (spending) it for some time.
Five Reasons You Should Save Money
1. Become Financial Independent
An effective way of achieving financial independence is by developing a savings culture. Once you can cultivate the habit of savings, you are on your way to gaining financial freedom. By putting money aside consistently, you can make some critical life decisions without worrying.
You are not financially free if your current lifestyle depends solely on your monthly income. It means that you cannot do certain things, such as resigning from a job with a toxic environment, starting your own business, getting married, or going on a vacation when you want to, because you cannot afford the expenses. Rather you are forced to keep on working to keep paying your bills.
But if you have been saving money for months or years, you can take any of the above decisions and still pay your bills comfortably.
2. Free From Debts
If you find yourself in debt, saving is one way of getting out of such a financial situation. Keeping money away every month or week (depending on how you are paid) helps you to break free from debts. This money piles up with time, and you can use it to repay the debt.
Furthermore, relying on credit cards for expenses can lead you into debt. To avoid incurring late fees or charges on your credit card, keep some money away to pay off your credit card bills monthly. This act is a sign of responsibility and financial discipline.
3. Purchasing A Home
Buying a house is one of the good financial decisions you can make as an individual. Besides improving the quality of your life, it saves you from expenses associated with residing in a rented apartment.
However, purchasing a home doesn’t come easy. It often requires high financial costs. And this explains why many people take home loans. Nevertheless, you still need to make a down payment even if you take a home loan.
To avoid going through the trouble of securing a home loan, you should start saving towards purchasing a house. If you consistently keep some part of your salary away for a couple of years, you can move from a tenant to a homeowner.
4. Purchasing A Car or An Expensive Product
Like houses, cars, and other expensive items come at a high cost, typically above your monthly salary. Still, the cost associated with a car or expensive product (such as household appliances or office equipment) shouldn’t stop you from having them.
The way out is to save for these items. If you would love to have a car without breaking the bank or running into debt, then you should save for it. With savings, you can pay the car’s expenses and get benefits accrued to paying upfront.
5. Unforeseen Emergencies
Unforeseen emergencies often occur when you are least prepared. They happen without forewarning and would require you to spend money you didn’t budget for. From health emergencies and car repairs to family events, unforeseen emergencies might cause you to go broke due to their expected expenses.
To prevent this from happening, you can be prepared ahead through savings. By maintaining an emergency fund account, you can easily offset the expenses associated with any emergency when they arise. Regularly keeping a part of your income in an emergency fund keeps you one step ahead of unforeseen circumstances.
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