Saving money is a bit like exercising. We all know how important both are, but it can be hard to actually get into the habit of doing either. Here are five reasons to help keep you motivated.
1. You’ll Be Prepared for Emergencies
Here’s an alarming fact: most Americans don’t have enough money saved to cover even relatively small unexpected expenses, such as emergency room co-pays, minor car repairs, or a broken furnace. Without cash on hand to cover these irregular but inevitable costs, you’re more likely to turn to credit cards or loans when the need arises. Not only are you forced to take on debt, but you don’t have time to shop around, making it more likely that you’ll end up with an expensive, high-interest loan.
2. You’ll Be More Independent
Having savings gives you more flexibility and independence. With a healthy amount of savings, you can feel more free to take risks, like starting your own business, heading back to school to train for a new career, purchasing a home of your own, or moving to a new city. Plus, without savings, you’re living on the financial edge, and you’re more likely to find yourself stuck in situations that you may not be satisfied with. Committing to savings today, even if it’s just a small amount, will start to give you the freedom to make different choices in your life.
3. You’ll Be Able to Reach Your Goals
We all have goals. Whatever your dreams, they likely have one thing in common — you’re probably going to need some money if you want them to become a reality. Few of those dreams are achievable if you don’t save for them.
4. You’ll Be Able to Earn More Money
Saving isn’t just about setting aside what you’ve already earned. It’s also about putting your money to work for you. Depending on where you save and invest your money, you can earn more just by being diligent about saving, rather than spending. And because of the power of compounding earnings, even relatively small amounts can grow significantly, provided you don’t touch your principal.
5. You’ll Be Happier
No one wants to suggest money is the only thing that can make us happy. But there’s also evidence that saving money, even in small amounts, can make you happier. In contrast, having debt (often a consequence of a lack of savings) tends to lead to more unhappiness.