“When I lost my job three years ago, my wife and I used that as an opportunity to start the businesses we’d been dreaming about, rather than scrambling to find another paycheck as quickly as possible,” Becker says. “We could only make that decision because of the years we’d spent building our savings.”
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“I love saving money because it means financial security,” says Kara Perez, who founded a financial education company that aims to empower women by providing them with the tools and education to reach their financial goals.
“Plain and simple, having money makes your life easier,” Perez says. “I save because I want my future self to have the same great lifestyle I have now, and I don’t want to get caught in a financial emergency.”
If you need help understanding the importance of saving money, consider these key reasons why you should save money now:
1. Saving can give you freedom
It can be tough to allocate some of your cash to a savings account if you don’t have a set goal for that money. Why save for later when you can spend on what you want today, right? But among the many reasons to save money is that even if you don’t know exactly what you’re saving for right now, you’ll likely find something you want to save for in the future. A new car, a new home, a child’s education… the possibilities are endless.
Part of the importance of saving money is to build cash reserves so you can take calculated risks with less worry. If you don’t have any savings, it may be harder to pursue certain passions. Take starting a business, for example. To be a small business owner, you’ll need financial backing to get it off the ground.
But if you set a savings goal and contribute to your savings each month, you can explore new opportunities, even if they may temporarily impact your earnings (if you set off as a small business owner, paychecks could be slow to come at the start).
Saving money takes discipline. And a certain amount of sacrifice.
The importance of saving money is rarely disputed. Saving is one of the most basic bits of financial advice out there. Despite the importance of saving money, many of us aren’t following through on that tip. When it comes to doing the right thing financially, just knowing you should save isn’t enough.
And that makes sense. It’s tough to do something consistently without understanding why you should save money and put in all that effort in the first place. After all, saving money takes discipline and a certain amount of sacrifice.
“Saving gives you the freedom to live life on your own terms”
Both saving and investing are important, but they are not the same. While both can help you build a more secure financial future, customers must understand the differences and know when to save and when to invest.
Savings are usually placed in low-risk savings account. Those looking to optimize their earnings should aim for a savings account with the highest annual percentage yield (as long as they can meet the minimum balance requirements).
“First and foremost, both include saving money for the future,”
Both savers and investors recognize the value of getting capital set aside.
The first step to start saving money is to figure out how much you spend. Keep track of all your expenses—that means every coffee, household item and cash tip.
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