Why is saving money important?

Why is saving money important?

What comes to your mind when someone asks why saving money is important? Financial security and freedom are your immediate natural responses. 

People have various reasons which motivate them to save money, but in the end, what we all commonly desire, is freedom and peace of mind. Unforeseen expenses and emergencies affect us terribly when we do not have savings to fall back on.

Have you ever found yourself in a tight spot where you needed extra income but lacked the means to get through it? Have you ever had to sell something precious to you just to keep up with expenses?  Even though we won’t realize it at the time, the anxiety and stress we encounter in these situations affect us permanently.

Let’s look at some critical points to convince us of the importance of saving money, even if it means sacrificing some present need.

– To face the unexpected

– Do more of what you enjoy

– Preparing for retirement

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– Reducing the strain on our relationships

– Purchasing expensive items outright

– The ability to transition to your dream career

To Face the Unexpected

Nothing stays the same. It doesn’t matter how much we plan and predict; we cannot be confident about how the rest of the day will be after we wake up. So how can we be sure of our future? There will always be challenges to overcome, and when they come, we will need money to help us manoeuvre through them. Be it an unexpected financial emergency, failing health, or even a friend or relative who needs our help, having savings to fall back on will help us to endure.

Do More of What You Enjoy

Happiness is the primary motivator behind many of our important decisions. Saving money is no exception; many people strive to improve their financial situation to enjoy life. Having additional money means you can spend on vacations, buy expensive items or just treat yourself to a luxurious meal whenever you feel like it. 

Preparing For Retirement

Nobody can work indefinitely. According to recent data, 23% of the current UK population is over 60 years of age. At this point, we will not be able to work and earn money. It could be due to retirement age, health issues, or even being made redundant in a failing economy.

The reason may vary, but the result is the same; we will no longer have a source of regular money and can no longer earn. This situation can be very stressful for someone who has no savings to fall back on. Idealists may say that money is not everything. Still, when bills become due, or there’s no food left in the fridge, we would have a clear answer to our initial doubt about why saving money is important.

Reducing the Strain In Your Relationships

In all relationships, be it with your friends, parents, or spouse, many circumstances can cause conflict and strife. However, one major cause of conflict and stress in relationships is a lack of money. A dispute will inevitably occur when you lack the necessary finances to participate in occasions or relieve the other party’s burden. Having money to help reduce the burden on others or being financially stable enough to support your family and friends through a difficult period will help to strengthen and improve the quality of your bond. 

Purchasing Expensive Items Outright

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Loans and credit cards have become commonplace in our society. According to statistical data, the average credit card debt per household as of July 2022 was £2,230 – The Money Charity. People are entranced by the ability to make payments even when they do not have the resources to do so. This instant gratification has caused issues in many people who have fallen into a debt trap.

Not just individually but even as a society. Purchasing expensive items on an instalment basis is a grace granted by credit card companies that allow people who would typically not have the means to do so to own the latest television or mobile phone. But in the repayment, you would spend significantly more money than the item is worth.

Also, since the refund is mapped out over a long period, the value of the thing would have diminished by the end of the repayment period. By saving money and having a large sum of extra cash at your disposal, you could purchase these items and enjoy them without the stress and burden of paying instalments.

The Ability to Transition to Your Dream Career

Is your current 9 to 5 job the one which excites you to the point of not needing an alarm to wake up in the morning? Is this the career of your dreams? Do you find it difficult to tear yourself away from your work because there’s nothing else you would rather be doing? Or do you spend your days dreaming of a different life? Is there something you’ve always wished you could do but didn’t have the freedom to risk leaving your current employment due to needing your salary to meet your expenses?

The answer lies in having enough money to support yourself when setting up your new business or career. It takes time to get started on a new path and to find opportunities to grow in a new field. It would be easy to see why saving money is essential because it would ensure you would have a comfortable transition from one job to another without fear and stress.

Why is saving money important?

There are no adverse outcomes to saving money. If there was a debate on why saving money is essential, no arguments that are made against it could be considered logical or practical. It will take time and much effort, especially if you are not in the habit of saving, but in the end, it will be worth it. Today, when you ask yourself why saving money is essential, you have taken the first step of many to build the life of your dreams.

Now you understand why saving money is important, you may have the question of where should you put your cash, In this article we go into more details of ways to save.

Where Should I Put My Cash?

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