Hamara Paisa

Why We Should Save

Why We Should Save

16 January 2018

We save, basically, because we cannot predict the future. Saving money can help you become financially secure and provide a safety net in case of an emergency.

If you do not earn much and you can barely pay your bills, the idea of saving money might seem laughable. When you hardly have any money at the end of the month, why even bother to try saving? However, everyone has to start somewhere and if you work at it, your financial situation is likely to improve over time.

Saving money is worth the effort. It gives you peace of mind, it gives you options, and the more you save, the easier it becomes to accumulate additional savings.

As you accumulate savings, your financial worries should diminish, as long as you are living within your means and not always looking for new things to buy. If you already know that next month’s rent is taken care of, if you have savings accounts for your children’s education and your own retirement you will sleep better at night. The reduced stress from having money in the bank frees up your energy for more enjoyable thoughts and activities.

The more money you have saved, the more you control your own destiny. If your job leaves you stressed you can resign even if you do not have a new job lined up yet, take time off to restore yourself before you look for new employment. If you are tired of living in an unsafe neighbourhood, you can move to a safer area because you will have enough for a deposit on a better home.

Reasons why we save:

·       Emergency cushion - This could be any number of things: repairs for your house, unexpected medical expenses or sudden loss of income. You will need money set aside for these emergencies to avoid going into debt to pay for your necessities.

·       Save to start your own business – This is a very worthy reason to save, be your own boss and hopefully control your future

·       Save for your old age – You will need income once you stop work

·       Education - The costs for education are rising every year and it's getting tougher to meet these demands.

·       Weddings – These can be a great expense, better to save earlier than later

·       Buy a big item – There will always be a big item one will want to save for, whether that is a motorcycle, car or house

How much can you potentially save:

It is very important that you develop a budget. You should have a clear idea how much money is going towards each expense such as rent, bills, food, children etc. Once you do this you will see how much money is left over and that could be potentially saved.

When developing a saving plan ask yourself these questions:

Are there any variable expenses that you can reduce or eliminate?

Is there anything you spend money on that you could eliminate and apply towards saving?

Can I reduce my bills by switching companies, such as TV package, Mobile phone package?

Saving money is incredibly important; it gives you peace of mind, expands your options for decisions that have a major effect on your quality of life and eventually gives you the option to retire. Most people who are wealthy got there through a combination of their own hard work and smart savings and investment decisions. You can become one of those people, too.

Take a look at the article > Tips on how to Save Money for some useful advice! 

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