WHY SHOULD YOU SAVE
Saving is one of the most basic bits of financial advice out there. Also, saving money is one of the essential aspects of building wealth and having a secure financial future. Saving money gives you a way out of the uncertainties of life and provides you with an opportunity to enjoy a quality life. Despite the importance of saving money, many of us aren’t savings. Saving does not come easy and most people are having a hard time saving because they do not understand why they should save money consistently. You may have asked yourself why it is so important to save money if you have enough to pay for everything you need every month. There are many reasons why you should save, but today I would like to share a few reasons why you should save money;
1. Savings can give you freedom — Do you know someone who is stuck in a job that they hate but because they don’t have the financial freedom to quit, they are still at that job and feel miserable? Savings some of your income/revenue consistently, does give you the freedom to do what you want at your convenience. If you are wondering why, you should save money, imagine giving yourself the freedom to choose what you want to do and at what time instead of feeling stuck in a particular situation or position because you have no money at your disposal. You might ask yourself, how much should I save? How much should you save depends on your financial goals? You might have a tangible goal that you want to pursue, and that goal will determine how much you should save.
2. Saving Provides Financial Security and Take Calculated Risks – Having money at all times makes you feel secure financially. Because of that financial security, it gives you the freedom to live life on your own terms. Also, saving money will help you build cash reserves that allow you to take calculated risks with less worry. You take calculated risks if you have a “buffer” of fallback in case of undesired results from the taken risk so if you don’t have any savings, it may be harder to pursue certain passions of yours such as starting a new business or traveling for a long time.
In conclusion, the importance of savings cannot be understated. Savings allows you to enjoy greater security in your life. Different people save for different reasons but in general, having savings will benefit you in the future. Also, if you have cash set aside for emergencies, you have a fallback should something unexpected happen. And, if you have savings set aside for discretionary expenses, you may be able to take risks or try new things. The best way to save is to pay yourself first; don’t forget to pay yourself (necessary expenses) before putting any money on the side for savings. Lastly, remember the earlier you start to save, the longer your money has to grow (i.e., because of compound interest, that is a subject of another day), and the less catching up you have to do as you get older.
Written by Kelvin Mkwawa, MBA
Seasoned Banker
Email address: Kelvin.e.mkwawa@gmail.com
