Here’s how saving money consistently can lead to happier and better financial life for you:
1. Save to pay off debts
Savings allow you to pay off debts in a much easier way. With a healthy savings account, you can easily make additional debt payments and get out of your debts in a shorter period of time.
2. Save for retirement
With adequate savings, you can build a secure and happy retirement life. During your retirement days, you need to have a sustainable pool of money that will meet all your daily needs and help you live a long healthy life.
3. Save for emergency fund
Savings allow you to face future uncertainties confidently. None of us can predict how life may unfold in the future and what financial and medical emergencies we might face. It is only with your emergency savings fund and your insurance you can prepare yourself to face the worst-case scenarios.
4. Save for unavoidable expenses
Save money for a sinking fund that will allow you to make big expenditures in the future without affecting your current lifestyle. When you have a separate fund for dealing with certain large expenses like, paying yearly taxes, home improvement, repairing your car, kitchen remodeling, purchasing necessary possessions and other known expenses, you will not feel the pinch in your bank account. This will help you avoid using your credit card and fall into another debt trap.
5. Save for college education
Education is expensive. The cost of pursuing a college degree, whether from a private institute or a public one, is rising every year. Saving money for your own college degree will empower you to pursue a college degree and cover your living expenses without falling into student debt or getting broke. You can also plan for the future and start saving for your child’s college education so that when the time comes, you will be fully prepared to support your child’s education. Whether you want to go back to school or send your child to an Ivy League college, it all starts with saving money.
There are innumerable other reasons for you to start saving immediately and start experience the happiness it brings with itself.
How you can save money and be happy
“Spend not where you may save; spare not where you must spend.” – John Ray
Spending money is fun and saving is hard work. But saving money doesn’t need to be a challenging task. You shouldn’t be required to make drastic lifestyle changes or make huge compromises to save money if you want to make it a lifetime habit.
Here are a few ways that can help you to get started with saving money.
1. Create a plan and follow it through
First of all, make a financial plan that allows you to fit savings into your money management and monthly spending schedule. This will depend on your income, your monthly living expenses as well as expenditures you can do without. Map out each expense that occurs in any given month and decides on an amount that you can comfortably set aside for your savings account. It doesn’t have to be a big sum of money. It can be a small fraction of your income.
The important thing is to start building the habit of saving money. Once you are comfortable with the habit of saving money, you can easily increase the amount based on your financial condition. Hence, it is important to make a financial plan and evaluate your monthly expenses.
2. Set a financial goal
What do you want to save for? Is it for renovating your home? Buying a new car? Your child’s education? Or an emergency fund perhaps? Setting up a goal will help you with your financial planning and motivate you to save consistently over time. Make sure your goal is a top priority so that you don’t indulge in making unnecessary purchases. Keep reminding yourself how much this goal means to you so that you can save up faster and avoid the temptation to waste money.
3. Track your spending
“Look everywhere you can to cut a little bit from your expenses. It will all add up to a meaningful sum.” – Suze Orman
Track everything you spend your money on. Even the smallest purchases and expenditures matter. Throughout the month, we make several forgettable small expenses. As a result, it may seem that money just tends to disappear despite your best efforts. Write down everything you spend your money on and don’t skip even the smallest details. This will allow you to track where and how much you are spending and help you understand which expenses are unnecessary and can be cut down.
4. Make arrangements with your bank
Talk with an executive or manager at your bank and do whatever you need to so that a fraction of your income is directly transferred to your savings account. There are systems that banks utilize to make it happen automatically. As you will transfer only a fraction of your paycheck to your savings account, you will not need to take it out. A separate savings account can be of great help for saving money, especially in case of emergencies. So if you don’t have one already, make it happen immediately.