Why Saving Money is Important
Why Do We Save Money
To first understand why saving money is important, we first must know why do we save money. These are the top 3 reasons we save money:
- We save money to spend on future purchases or expenses.
- The older we grow, the less ability to work we have. Humans don’t want to have to make money near the end of their lives. Basically, we save so we can enjoy life without having to work (aka retirement).
- Since humans can’t predict the future, we save money for unexpected expenses.
Saving for Purchases and Expenses
Most likely, one of your paychecks can’t pay for a house itself. When buying a house, you have to purchase a house by saving the money you have coming in. No matter the revenue source you have.
But you use your money not just for saving, but for spending. Don’t forget you have to spend on money on food, rent, gas, bills, clothes, etc.
If we spend all our money from each of our paychecks, how are we going to save up for that house we wanted?
It is complicated to know how much money we need to put away and how much money we should use until our next paycheck.
That is why is why budgeting is so important. No matter who you are, you need a budget.
Saving for Retirement
The average age to reach retirement in America is growing larger and larger each day. This mainly has to do with our employment rate, national debt, and social trends.
One of the current social trends America is infected with is that Americans are saving less money than ever before!
A big part of this has to do with the luxury items we buy. American’s seem to almost never be satisfied with how we live our lives. We lust over cars, houses, and clothes and we always try to fight for these products.
Each time we buy items we don’t need, the worse off our future retirement savings are.
You should be saving for retirement as early as 18 years old. This may sound crazy to hear, but trust me you need to save for your retirement.
If you don’t have a 401(k) or and IRA account, I highly suggest looking into these options for saving for your retirement.
If you don’t save for retirement, you will be working until you die. That’s hard to hear, but it’s the grim truth.
Saving for Unexpected Expenses
You’re having a nice day. You just bought a new car and are driving it around. All of a sudden you hit you hit a bump in the road. You try to regain control but you swerve off and hit a tree.
Don’t worry you are ok…. physically. Financially you may not be. Hospital bills can get ridiculously pricey.
“But I have good insurance; they will take care of everything!”
This is most likely not the case. Even with insurance, you will most likely have to pay a percentage of the cost. And you may have to pay for any other damages you caused with the crash.
If you haven’t saved up money, you could be in deep doo doo.
The next thing you know, debt collectors are calling you nonstop and you have to pull out a loan. And then another loan. But whatever you do, don’t get a payday loan!
Financial Horror Stories
Richard Dever is a 74-year-old man who works as a temporary groundskeeper/custodian. He left his home in Indiana for this temporary job 1,400 miles away in Maine. Dever’s work includes taking out the garbage, cleaning showers, and cutting grass. Dever explains, “I’m going to work until I die, if I can, because I need the money.”
Sharon Tirabassi was awarded over 10 million dollars from the Ontario Lottery. Tirabassi spent her winnings on, “big house, fancy cars, designer clothes, lavish parties, exotic trips, handouts to family, loans to friends.” Tirabassi explains, “All of that other stuff was fun in the beginning, now it’s like, back to life.” All of this happened in the span of less than 10 years.
Another lottery winner, Evelyn Adams, won a nice 5.4 million dollars. But she apparently lost it all gambling in Atlantic City. She said she couldn’t go anywhere without people knowing who she is.
Whether or not you have money or you come into money, you need to save you money. Without saving money, you may end up like all of these people listed above.
Many say that they are different and that won’t happen to them. But it can happen to you. Sadly, this is a common occurrence that has been happening forever now.
If you understand in some aspect why saving is important, i’m going to tell you how you can save better.
How Can You Save Better
Now we get to know how can you save better. Well, this is a difficult answer because there are so many things that Americans spend their money on. This is why I have devoted this whole website to such. I’ll give you the simple answer on why saving is important.
You need to know how to budget your money! And that doesn’t mean be mindful of your purchases and expenses (which you should already be doing). You need to actually make a budget.
If you are new or even experienced on how to make a budget, check out how to budget money. This article will give you more than enough information on how to budget your money.
Cutting Down on Your Expenses
With your budget, you’ll hopefully see your allowance for every aspect of what you spend your money on. But before you put things down on your expense section such as rent, car insurance, and your electricity bill, think about it for a second.
I bet there are things you could be saving on. Like from my examples from above, if you are a renter, is it possible to save for payments on a house or condo? Are you positive that you are paying the best price for your car insurance? Are you sure that your electricity bill is the best price you could be paying?
These are only a few examples of all the complex expense payments you could be paying.
Cutting Down on Your Spending
I bet everyone reading this can cut down on your spending. This a major problem for most and this is why saving is important.
Do you really need this? Can you buy less of this? Why are you buying this?
Ask yourself this question because these material things won’t buy you happiness. Businesses love to trick consumers into thinking that if you buy this new product, it will make you happy.
Make sure you look in to reusing items for cheap alternatives as well.
But please make sure you follow this website on it’s updates. Because saving money is so complicated, it’s hard to know exactly why saving is important from one article.
If you liked this article, please share this on social media and subscribe to Galizer in the side bar to your right or below in the footer. Thanks everyone and keep saving money!