Pay yourself first: Why you should save, save, and save!

Pay yourself first: Why you should save, save, and save!

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Why must you worry about setting money aside every other month if you have enough to cover everything you need?

There are a number of reasons why we should save money. Various individuals save for different purposes, but if you have a clear objective or purpose for the money you are saving, it makes saving simpler.

Here are the main reasons why you should maintain your savings:

1. Emergency Cushion

There’s several reasons why you and your family need to save for an emergency cushion. Unexpected incidents, house reconstructions, and car repairs are few reasons for building an emergency fund. Not only does it provide you with money to cover for these types of emergencies, but it also gives you peace of mind in case you lose your job, or you become too ill to go to work. In other words, we don’t what will happen so it’s always best to be prepared for whatever life holds to us.

2. Retirement Fund

Like most people, you are going to retire at some age in your life. And to be able to enjoy and have a comfortable life at that time, you need to build a retirement fund. If you start building a retirement fund now, you can retire sooner or whenever you want. 

The earlier you begin to save for retirement, the less in the future you will have to save. You can put your money to work for you, particularly if you take advantage of the cumulative interest.

You will earn more interest on the money you have as you continue to contribute over time than you put in each month.

ALSO READ: Investing: A Great Way to Grow Your Money

3. Education

As a parent, you want your child to have the best education possible, one that has enormous opportunities and possibilities. But no matter your child’s age, a college may seem far away. Here’s a secret: rather than wait for your children to actually go to college, it’s best to start saving now. Thinking about the future can mean a promising tomorrow for your child and financial freedom for you.

4. Real Estate Deposit

When you are applying for a loan, your deposit is one of the biggest factors. Banks are more likely to approve your application if you have larger money to put down upfront. One more main reason is, larger deposits reduce your monthly house payment as well as the mortgage rates. This means you will have more money in your monthly budget that you can use for your other important needs.

8 EFFECTIVE TIPS FOR SAVING MONEY:

  1. Gather and deposit loose coins/change in the bank. Use a piggy bank and when it’s full, deposit its entire content.
  2. Save any unexpected money that you receive like money from income tax returns.
  3. Pack lunch for work and save on lunch money.
  4. Try to do one less expensive thing a week and use it for your savings.
  5. Buy cheaper products and practice frugality to save more money.
  6. Before buying anything, compare the price of major items. Shop around before making significant purchases, do your due diligence.
  7. Schedule a “Spend Nothing Week” every month.
  8. Make the most of vouchers and discounts. Coupons are a great way of reducing the cost of living.

Basically, we save because we are unable to predict the future. In case of an emergency, saving money can help you become financially secure and it also provides a financial security net.

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