Saving money is important for your financial health.
I am a huge advocate for saving money. It serves my family and me very well. I don’t even want to think about where we might be if we were not in the habit of regularly putting money aside.
However, if you are on a tight budget, then you might be wondering how on earth you can save money when you barely have enough to pay your bills.
I’ve been there. I was living paycheck to paycheck. Anxiety was a regular feeling for me. I never knew if there was enough money coming in to cover our expenses.
I understand feeling frustrated with little progress. However, with dedication and a positive mindset, I also know that it gets much better.
If you do not have a tight budget then I hope you are regularly saving money. Although, I am guessing that because you landed on this post you probably are not. Instead, you are looking for reasons to save money.
This post outlines 10 reasons why saving money is important. Let’s get started.
Important reasons for saving money
Emergencies
You never know when something unexpected comes up, which is why we call it an emergency. At the very least, you want to have an emergency fund that you have access to if needed. Therefore, you can focus on the emergency without stressing how you will pay for it.
How much money you keep in this fund depends on your comfort zone and financial situation.
Financial freedom
There are many definitions of financial freedom. For this post, I define it as freedom to make financial choices that align with your values.
If you are living paycheck to paycheck and barely making ends meet then you are dependent on your money for your current expenses. Moreover, when you are dependent on something, there is no freedom. You are limited.
What is one method of ditching the dependence? Save money.
Regularly saving money allows you to build a nest egg that can be used for creating a financially free lifestyle. A lifestyle where you are not depending on your paycheck for your basic living expenses.
Irregular expenses
Irregular expenses should be included in your budget. But, we are all human and sometimes we forget. Covering irregular expenses is a good reason to save money. Wouldn’t you feel better paying cash for your car service instead of adding it to your credit card?
Big purchases
Saving money should be a habit. It often helps to have a goal that motivates you.
If you have your eyes on a new car, a lavish vacation, a home remodel, or a swanky purse, then start a money savings plan.
Saving money to pay cash for big purchases empowers you. You do not owe anybody anything and are no longer working to pay for something you already have. You are your money boss.
Reduced stress
Reducing stress is one of the reasons for saving money.
Wouldn’t it be great if you could handle almost any reasonable unexpected expense? When something occurs, you consider it an inconvenience instead of the feeling of doom?
What about the thought of not depending on your current job? Knowing that you will be okay if you lose your job. Or, maybe you are the one who wants to leave to explore new opportunities.
Think about how finances create stress for you and how it might be if you had money set aside. Would you feel less stressed? Are there things you would do differently?
Helping others
It’s a great feeling to give and help others in need. But, getting into debt to help others may not be the best choice. If helping others ranks high for you then it is a good reason to save money. Create a separate account for this purpose.
Saving money for fun stuff
Who does not want to have fun? When you build up a savings account and are regularly contributing to it, you will find that there is money available for spontaneous fun. It might not feel so bad pulling out a little extra to go to the beach for the day. Better yet, add fun money to your budget so you can have regular doses of fun in your life.
Saving money for Retirement
How do you want to live when you retire? It might sound like that is a long time from now for you. Or, maybe it is creeping up.
Retirement is a good reason for saving money, whatever age you are. Regardless of what lifestyle you want when you retire, there is one thing that will be true.
You do not want to have to do anything for money. I see many retirement-aged people working because they need to eat. Make it a goal that if you work, it will be for fun.
College Education
College may be a good reason for you to save money. You can start saving for your children’s college fund when they are babies.
There are many ways you can do this. The 529 investment plans may work well for you. They give more interest than a standard savings account.
You can also choose to put money aside each month into a standard savings account. There are also other investment accounts available. I suggest discussing this with a financial advisor if you choose the investment route.
We opted out of investing money for college funds. Instead, we saved enough money to cover the expenses of a four-year local college. You will ultimately need to do what makes sense for you and your family.
Marriage and Kids are reasons for saving money
Getting married and/or having children is a complete game-changer for your current financial situation. Being in the habit of saving money will help you if and when these life stages happen.
Weddings can be pretty pricey. I suggest not to go into debt over your wedding. Yes, it is a glorious day. However, you don’t want to spend the next ten years paying for it. If marriage is in your near future, start saving now if you can.
If you plan on having children, remember that you will be paying for them for at least eighteen years. Kids are not cheap. Get in the habit of saving money now.
Summary of reasons for saving money
There are so many reasons for saving money. Find a reason or two or three that motivates you to start saving now. If you have a low income or a tight budget, then it is more challenging. Take time to find where you can trim some of the fat and add income until you are at a place where you can comfortably and continually save money.
Saving money challenge
Do this right now. Get up and find $5. Look under your couch, check all your pockets, check your car, and look everywhere for $5.00. Put the money in a jar.
Do this every day for one year. You will have $1825.00.
If you cannot find $5, then reduce your spending that day by $5 and put the savings in the jar.
If $5 is too much, try for $2. Save what you can. The only requirement is to save something every single day.
I would love to hear how you did with this. Please send me your comments.
Thanks for reading!
Wishing you all the best.
Stay balanced,
Jill