This is a topic – or question if you’d prefer – whose answer seems obvious. You may be saying, “Why ever not? Surely, everybody knows they need to save money for the future.
Well, that’s true. But the problem is that we are humans, and sometimes, knowing the importance of something on the surface isn’t enough, we often need enough proof to convince us of the benefit of even the most obvious things.
I am saying this as someone who has been there. For many years of my life when I graduated school and started working, my saving culture was a mess. It wasn’t until I lost a job and had nothing in my account to bank on that I realised how much trouble I was in. A few months of suffering later, nobody taught me to get my acts together when I landed the next job.
That brings me to the most germane reason to save. It is important to save for the future because it saves you from needless suffering; it is really that simple. As you would agree, life is not a bed of roses. Many times, things can come up that require money to rescue you. Life will be simpler in such situations if you have some at hand.
But in addition to the above, there are many other reasons to save money for the future. In this article, I will discuss some of them.
7 Major Reasons to Save Money for the Future
If you are ever in doubt about why it is important to secure your future, here are the seven benefits of saving money for the future.
1. Emergency Fund
Having an emergency fund is one of the benefits of saving money. Emergencies are usually a matter of if, not when. They are a part of life, and we need to prepare for them. Having an emergency fund will provide you with a cushion in case of any emergency, such as job loss, unexpected home repairs or medical expenses.
Financial experts advise having an emergency fund of three to six months’ worth of expenses. Of course, this will depend on other factors such as lifestyle, dependents, and income, but it should work for the average person.
However, even if you have crossed the six-month bracket, there is no law against saving for more months if you have no pressing financial goal or need. The more you have in your emergency fund, the greater your peace of mind. So, if you are yet to have an emergency fund, this is a good time to set aside a percentage of your income to build one.
2. Avoid Debt
Debts will put you under financial strain, and many times, they eat into your savings and make it difficult or impossible to save.
To avoid falling into this trap, it is beneficial to save for the future, so when you need to spend money to purchase certain necessities, you won’t need to take a loan.
But if you start with debts – considering most of them attract interest – the money piles up and poses a financial problem that takes longer than necessary to solve.
You can save yourself this headache by saving now before you need any huge financial commitment.
Also Read: Financing vs Paying Cash: Pros and Cons
3. Achieve Financial Goals
Let me start by advising you to have financial goals if you don’t have one. It is not expedient to just make money without any clear plans. This is not sustainable because when you have no goal, you are unlikely to have any motivation to save and build a solid financial future.
You need to have a financial goal at every point in your life. It could start by building an emergency fund. If that’s done, you can create a retirement plan or make sure you can retire early so you can travel the world with your spouse. A financial goal could also be ensuring your children are not educated on student loans.
Whatever it is, having a financial goal motivates you to save. Once you have set your goal, saving towards it is the only way to meet it.
4. Investment
Saving is great but will most likely not make you wealthy. If you want to never bother about money as a senior citizen, you must also invest. That’s the only way to make your money work for you.
However, it is difficult to invest when you have no savings. You can only take advantage of investment opportunities when you have something set aside.
If you are wondering how to save money for future investment, you can simply make it a financial goal and save towards it.
5. Financial Independence
I don’t know about you, but I envision a time when I don’t have to work to survive, and I am simply working for passion or can even afford to take a break from work. If that’s your plan as well, you need to save. You cannot blow everything you have now and expect to be financially independent in the future.
You must learn the art of delayed gratification and spend more on wants rather than needs to create a wholesome future for yourself and your family.
Also Read: Common Financial Mistakes to Avoid for a Wholesome Life
6. Career Flexibility and Fulfillment
Like I mentioned earlier, I’m sure you don’t want to work for survival all your life. But if you don’t have enough money to survive, then there is no way that won’t be the case.
Only people with investments or passive income can enjoy career flexibility or even fulfilment. Most people, unfortunately, have to endure jobs they don’t like because they need to survive.
I’d bet that’s not your dream, at least not forever. If it isn’t, save to achieve your goal.
7. Hobbies and Interests
Do you want to be able to fund your hobbies and interests? If yes, you need to save. Believe it or not, for many people, having the time to engage in their hobby is a luxury because they need to work.
If you enjoy travelling like I do, then you know you don’t just require money; you also need the luxury of time. That should be enough motivation to save money for the future.
Conclusion
Saving has a lot to do with delayed gratification. You are likely not to save much if you are always focused on getting things right now. Understand that some things can be left on the back burner until you have more than enough to spare for them.
Now, this doesn’t mean you should never splurge or treat yourself. But the truth is we always know when we are getting the well-needed treat and when we are overspending. When your intuition starts screaming, it means you are doing too much.
And if you are addicted to shopping like Rebecca Bloomwood in Sophie Kinsella’s Confession of a Shopaholic, don’t be afraid to seek help. You deserve a financially independent future, so do all you can to achieve it.
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