Money Management 101: Why You Should Always Save First
Saving can be pretty challenging especially when you are not used to it. I can get especially hard when you earn just enough for the household. Many of us are always bothered by all those expenses that we are made to pay until we get old. However, saving should not be seen as the burden that most people think it is. Here are some reasons why.
It Teaches You the Correct Financial Habits
If you are not used to saving, you might think that putting an amount aside just when you get your paycheck would make no sense. You have rent, the monthly amortization for your car, bills and a lot more, so you might think that these are your priorities and not saving. Of course, you have entertained the value of saving before and have heard of how good it will be for you in the long run. However, time just goes on and on and you have not put anything aside at all.
When you save first, you teach yourself a financial discipline that successful people have. Whether or not you believe it, there will always be some money left over after you pay your bills and monthly amortizations no matter how small it would be. Saving does not mean that you have to put aside large amounts monthly, you can start with whatever you are comfortable with and gradually increase this amount.
You Have Money in Case of Emergency
You might not start with a lot when you begin saving but, before you know it, you will have enough money to cover even some of the worst emergencies you can think of. Of course, you have to be answerable for these yourself since those who answer for your emergencies (at least, for now) will not always be there.
You can never predict what will happen tomorrow or the day after but, for sure, things will not always be smooth. You have to be ready for whatever gets thrown your way, no matter what obstacle that may be. When you have savings, you have a financial buffer. Whether the emergency comes in the form of a parking ticket or something much worse, it would greatly help if you have set aside some funds.
It Sets You Free
You might think that saving first restricts you. The truth is, it frees you. You will eventually have money to purchase that house you always wanted, to plan for retirement and a lot more. Many people are slaves to student loans, car loans, house loans and mortgages. These are like chains that can bind you to the ground if you do not deal with them right away because interest rates can be paralyzing. However, if you have savings, you can deal with these and break free earlier.
Your Money Will Grow
Forbes says that the sooner you start saving, the better off you will be. Your money can grow more if you save earlier. This allows you to take advantage of compound growth, which exponentially increases the amount that you can earn. In addition to that, you can also ensure that your financial goals get funded before the expenses get in. If you wait too long, your house might need some fixing or a temporary layoff could throw you off the hook.
These sudden expenses should not actually be a surprise. There are going to be things that you just cannot control. When you have money in the bank, you make the most out of its value.
You Will Reach Your Financial Goals
Those who do not really care do not have financial goals at all. In reality, everyone has one. Whether you happen to be a kid saving up for a toy that you have always wanted, a college student who wants new shoes or a fully grown working adult dealing with a lot of bill, loans or expenses, everyone has financial goals. How to reach these is no secret. It is by saving.
Saving is not actually about how much you put aside. Rather, it is about how much you get to keep. You might be able to develop that discipline of paying yourself first, but totally blow it on things that you do not really need. If, however, you develop the correct financial habits, your money goals become more attainable.
When you save, you open up a new door of opportunity. You set yourself free and reach your financial goals earlier. Do you agree? Share with us your thoughts in the comments below.
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