Saving money is so important for many reasons. Some of the reasons that saving money is so important have to do with security and safety, while other important reasons for saving money have more to do just with the practical aspect of trying to plan ahead for major expenses.
In terms of emergencies, it is so important to be saving money. While no one likes to think about the possibility that they will lose their job, become disabled, or have some other sort of disastrous financial crisis, the fact of the matter is that it happens to people all of the time. Even much smaller emergencies, such as needing car repairs, are better handled by having saved money along the way, as opposed to having to scrape money together during a crisis. Saving money is so important for these types of situations. If at all possible, you should have a savings of three months worth of your expenses to help in case of emergencies.
Saving money is important for planning ahead, too. Almost every parent would like to see their children go to college, for example. However, many children will not be able to go to college on scholarships. Those that do not will either have to find a way to pay for college or to take out student loans. Student loans may not even cover all of their expenses. Saving money is an important part of providing for your child or childrens’ education. Education is not the only area that parents should save for, in regard to their children. For example, in the same way that parents save money as an important part of education, they may also save money for their childrens weddings, or to help their child buy their first car, or even their first home.
Finally, saving money can be an important part of just enjoying life. Taking a trip to Disney World is a lot more enjoyable when you know that you have paid for the trip with money from savings, as opposed to using credit cards and having to pay for the trip for years to come.
How To Save Money
Saving money, especially this time and age when there are so many temptations calling out to you every second of the day, is very, very difficult. From loans which turns into college debt, to buying highly expensive smart phones which is said to be at the value of a person’s kidney, needless to say, millennials or anyone born in modern generation will and have a difficult time in preventing themselves from spending.
Now, the big question is how do you save money?
As stated before, there are so many temptations here and there; however, it is also important to take into account that due to inflation and increase in demand, prices even for some common goods have skyrocketed to the point that the marginalized part of society increased more than the capable ones or the middle class and above who are able to buy their daily life necessities. Thinking about this, it is almost an impossibility to even save money, especially for those living in cities or areas where taxes are high with very low income and some do not even reach minimum wage, or rent is high due to congestion but there are still many ways in order to save money, regardless of whether or not, you are saving a huge or small amount of cash per period.
The following are tips and tricks in order for you to efficiently save your dough:
I cannot put enough emphasis on how important it is to note down every expenses you make. Keep track of EVERYTHING – yes, that means even the cost you spent on toothpaste, newspaper, snacks, everything. You need to take into account every penny, every cent you spend, and you need to be able to efficiently organize those set of data so that once you need to consult your bank or in need of money to pull out, you are sure on how much money you have left and what you actually spent on instead of spending your money like there’s no tomorrow.
By this I mean, plan ahead. If for example, you want to save a million dollars in 4 years’ time, make a timetable on how much you should save per interval and restrict yourself to how any dollars you can only spend.
- Choose a Target to Save for
Once you have set an amount you want to target, you now have to choose on what you will do with your money after. You can either save money for material possessions such as a car or a house or you can simply put it in your savings account in the bank for retirement. The choice is up to you. Choose wisely.
- Efficiently Decide on your Priorities
Material possessions have a limited life span, especially for technology such as cars or phones. For sure, it is inevitable that your car must be replaced, say after 10 years or so. It is then important for you to save money, not only for long-term goals such as retirement but also for short-term goals such as replacing whatever it is in need to be replaced.
- Use Legitimate Means of Saving Money and Make it Automatic
Saving money in a piggy bank is good for pennies; however, saving money for many wads of cash should be saved in another place, particularly in a bank. You are free to choose which type of bank account you want to save your money in but I highly suggest you put your money in a savings account, make it a habit to never always do cash transactions by availing modes of payments such as cheque and credit/debit card. Another thing is you should have the habit of saving money automatically.
For security purposes, it is important that you watch your progress per month. This will help you and encourage you to continue saving money and be able to hit your goals quicker and easier.