When you have adequate savings, you can avoid falling into debt or at least manage to take care of your family while you pay off your debts. But debts can be a barrier to building up your savings account. However, you can still manage to save money and make debt payments simultaneously with proper financial planning.
Why you should start saving immediately
“A budget is telling your money where to go instead of wondering where it went.” – John C. Maxwell
Still wondering why you save money and how it can bring some much-needed happiness to your life? Savings is the perfect shield that protects you from devastating financial downfall. Saving is a money management skill that you master through commitment, compromise, and patience.
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.