Why should you save money? Save Money and Money will save you, is a common saying. Each one of us has listened to our parents lecturing us to save money and making it a habit. But you will agree that it is easier said than done. Especially when we come from a background where survival is the biggest challenge. You might say we are not rich that we can save, we struggle to keep even. However, wise and experience often advise that “do not save what is left after spending” rather “spend what is left after saving”. If this is the principle we follow in our life then no one can give an excuse that they could not save.
Some might reason that saving at the cost of being in need or saving at the cost of struggling to spend for necessities is foolish. After all, we work hard and there is no reason why we should not be able to enjoy the money we earn. Others can argue that savings are not wise.
The savings you put aside do not increase as per the rate of inflation. So by the time you plan to use the money you saved, its value will diminish. If you agree with this then give some thought to Bangambiki Habyarimana, who said, “I used to say why save money if I’ll die tomorrow, I haven’t died yet and I have nothing to survive on“.
I also used to feel that it is important to be able to enjoy your money and give a comfortable life to your dear ones, savings can follow once the expenditures are even. Trust me you do not realize when time flies and you are never able to save money.
It is best to start the habit of saving money as early as possible. In the beginning, the amount can be very less but when you start seeing the accumulated wealth it will motivate you and make you feel good about your choices. Another wise saying is the best time to save money is when you have it.
If you wait for the right time to start saving, it never comes. Normally, we think about earning, spending, and saving what is left (which most of the time doesn’t happen) However, try to follow Earn – Save – Spend…
However, the question is why? Why should you save? Let’s consider the following points.
- Saving gives you peace of mind. When you know that there is something accumulated for times of need, it allows you to live a stress-free life. On the other hand, if you have nothing to rely on, the uncertainties will keep you stressed and worried.
- Savings gives you freedom of choice. Suppose you are stuck in a job you hate. If you accumulate savings, you can look forward to breaking free from the job and follow your dreams. Savings will allow you to experiment and try different things. On the contrary with no savings, you are forced to work and tied up.
- Security in times of financial emergencies. We are not immune to market fluctuations and unfortunate events in life. Borrowing is very easy but every time you borrow, you are robbing your future self. So it is anytime better to have savings for unforeseen expenditures instead of borrowing.
- Wealth Building: Investing your savings allow you to create wealth. Moreover, if you use compounding investments, it grows the wealth faster. Compounding interest means that you earn the interest on the accumulated interest over time. Interest on interest can cause your wealth to grow rapidly. The wealth allows you to live comfortably when you are unable to earn. It allows you to leave a legacy behind for your children. It can lead to a life of luxury also.