The Basic Facts About Why You Should Save Your Money
The reason why you are waking up every day and preparing yourself to work is for you to have money and solve some of your financial problems.
Even, if you are a student, do you know that going to school is actually a way of planning yourself for the future which is the money making aspect?
But, what happen when after working for hours, days or month and when you actually get your money within a twinkle of an eye all the money got finish without using it on important things?
Do you think is magic? No, it isn’t. You actually spent the money using your own hands. But, what could have been the cause of wasting money without proper budgeting?
You failed to make a proper planning on how to spend your money and that’s the reason why you can’t understand how you actually spent the money.
Do you know that saving your money and spending it wisely will help you to overcome some temptation because there’s no how you will have money that you won’t pass through some certain things which will actually make you to spend the money.
But, let the things you are spending your money on be beneficial to you and your families even the people around you.
Don’t always like spending your money unnecessarily because you are getting old. Stop enticing people with your money and do the right thing because you can’t satisfy anybody in this life.
So, it’s time for you to get things done the right way so that you can make your life better.
Always have plans for the future and stop hanging around with people that have no plans for their selves.
Why You Should Save Your Money.
1. Get Out of Debt
If you ever want to get out of debt, you have to have some money saved. Sounds ironic, doesn’t it? However, the credit cards are never going to get paid off if you have to keep using them for every “emergency” that comes along.
Even if you are an awesome planner, stats show that half of us experience at least one totally unexpected expense each year (and half of those will be unexpected car trouble).
So before you start aggressively paying off your credit cards, you should save up $500 to $1,000 as a reserve fund.
Then when unexpected things come up, you can pay them out of your reserve fund rather than put them on your credit cards. Maintaining a “reserve fund” will also help you to notice if your spending is getting out of hand.
As much as we hope that emergencies won’t happen, we all know that they do. A family member can develop a health issue, you might need to make an emergency trip, you may have a car accident or breakdown, severe weather could flood your basement or crack your pipes, or you may have to fly to a loved one’s funeral.
Any of these emergencies can be expensive, and we all know that we will likely encounter some sort of emergency from time to time. So why not be prepared rather than potentially become another victim of an emergency.
3. You Could Lose Your Job or Get Hurt
In good times, everyone thinks that their job is secure, but in bad times, many begin to realize that bad things can happen to anyone. You could suddenly lose your job, your business could dry up, and you might get injured either physically or psychologically or become too sick to work.
Any of these things can happen to you. Employment Insurance (EI) doesn’t kick in until you have been unemployed for 6 weeks.
Do you have enough savings to tie you over or will you be living on credit? Living on credit during a time like this can quickly make a bad situation worse. Minimum payments become higher and higher until they are unaffordable and credit limits no longer budge.
Then when you finally do get some income, what used to be enough doesn’t get you by because you have all these new debt payments to make each month. So now you actually need more income than before because you’ll need to pay down these debts and eventually work to get them paid off.
4. Become Financially Independent
The measuring stick for being rich is different depending on who you talk to. However, the one thing that the notion of “being rich or wealthy” means to most people is having financial independence and savings to depend on.
Calling your own shots, financially speaking, means having the freedom to make choices in your life separate from earning a pay cheque.
This may mean being able to take a vacation whenever you want to, leaving work and going back to school to switch careers, starting your own business or investing in someone else’s start-up, helping family members, taking on a lesser paying job that is more personally satisfying than financially beneficial, or a big one these days – retiring when you want to rather than working because you have to.
Financial independence isn’t the same as being rich, but not having to depend on receiving certain pay cheque can sure make you feel rich beyond your wildest dreams! Having savings that you can rely on is what it takes to become “rich,” no matter how you define it.
5. Buy a Home
The bank won’t lend you money to buy a house unless you have a down payment, and you are not allowed to borrow a down payment. You must have this money saved up or have someone give it to you and not lend it to you.
Your down payment needs to be at least 5% of the purchase price of the house, and then the bank will consider lending you the other 95%. There are all sorts of other costs and fees that you need to pay when you buy a home, so you will need an additional 5% just for those costs. Savings is what will open the door to owning a home.
6. Annual Expenses
If you want to have a good, relatively stress-free financial life, you need to save for annual expenses. These may include money for gifts, vacations, vehicle maintenance, minor home repairs, fixing appliances, property taxes and possibly income tax.
It can be tempting to refinance a mortgage to pay off debt or to use a line of credit to pay off high interest credit cards, but it is dangerous to endlessly put expenses on credit without actually paying them off.
The best way to manage these types of expenses is to save for them in advance. This will not only save you money, but it will give you peace of mind.
7. To Have a Good Life
There are huge emotional, psychological and physical consequences to always living stressfully, from hand to mouth. People who don’t plan for their future seem to run from “crisis” to “crisis.”
There is a little known truth that happiness can come from being organized. Being organized isn’t going to make you happy all by itself, but it can sure help.
There’s so much in your future that you don’t have control over, so putting aside some money to spend when you need it is actually organizing and taking control of your future and financial affairs. You have nothing to lose by saving – and only a happier future to gain.