It’s never to late to start saving money. The sooner you get started, the better prepared you’ll be for what life throws your way.
Regardless of where you are in life, the time to start saving money is now. Putting aside a portion of your income or increasing your savings efforts is always a smart decision.
Why Is Saving Important?
Too many of us underestimate the importance of saving money and how it can help a family become financially secure.
- How would it feel if you were able to break the cycle of living paycheck to paycheck?
- Wouldn’t you like to rest easy knowing that you have the money available to pay for that unexpected home repair?
- Or, know you’re covered if a medical emergency occurs?
Saving money can help with these and a variety of other issues. Are you planning to purchase a new home? Do you need to purchase a new car or would you like to take a vacation? Your savings can fund these types of expenses instead of having to take on additional debt.
How Do I Begin to Save Money?
For many people, saving is not as easy as depositing money into a bank account each week. Money for saving is often viewed as the amount that remains after current needs and wants are met. It’s important to be able to distinguish between an expense that’s a necessity and something that’s nice to have. Your electric bill is a necessity, but a new pair of shoes is a nicety.
One common savings strategy is to pay yourself first each time you receive a paycheck, similar to paying a bill. Encourage yourself to save money by setting a goal for your savings. Make it something that’s important and meaningful to you. This will help you decide if the potential purchase is worth it.
How Much Should I Save?
Experts recommend that households have savings to cover at least six months of expenses. Begin by saving 10 to 20% of your net income per month until you reach this amount. But be realistic. If that amount is unreasonable at this point, adjust it and gradually increase it over time. Make saving enough money to fund your expenses for at least 180 days your top priority.
But don’t stop there. Saving isn’t a one-time event; it’s a continual process that should be part of your overall financial plan. It actually plays a bigger part in your life than you’re probably aware. Nevin Adams, Director of the American Savings Education Council, offered three important reasons why Americans should save more money1:
Savers Are Happier than Spenders
Yes, it’s true. Putting money aside in a savings account can make you feel happier, according to Ally Bank’s Money and Happiness Survey. Eighty-five percent of people surveyed say they’re happier now as compared to when they didn’t have any money saved.
Having money tucked away can bring you closer to achieving your dreams. Whether that’s buying sports season tickets or traveling the world. The goals you set offer motivation and reaching them brings great satisfaction and feelings of self-worth. It can also offer the security of a financial safety net.
The Bottom Line
Everyone has the ability to save money, regardless of how much they earn. It just takes some careful budgeting and discipline.
As you watch your savings grow, your confidence will fuel your efforts. Before you know it, you’ll be headed down the road to financial health. The sooner you start saving, the sooner you know that you’re prepared for the future, regardless of what it brings.
1 Eric McWhinnie. “3 Reasons Why You Should Save More Money.” Retirement Cheat Sheet. cheatsheet.com >> Home >> Personal Finance Advice. Dec. 30 2014. http://www.cheatsheet.com/personal-finance/3-reasons-why-you-should-save-more-money.html/?a=viewall