Saving money is an ideal way for individuals to secure themselves financially. By having funds stored away, individuals have a healthy nest egg that may help them build wealth.
Here’s why it is important to start saving:
Enables financial independence
Being financially independent means that you can start your own business or you can opt to go back to study and switch careers. Saving regularly enables this, because you aren’t living from paycheque to paycheque.
Develop healthy financial habits
Saving regularly can make it easier for you to buy big-ticket items. Saving on a regular basis means that you are more likely to have the behaviour needed to be able to accumulate wealth. By being patient and willing to delay gratification, you will be able to save more over the long-term. Healthy financial behaviours tend to last.
Save for Annual Expenses
For peace of mind, it’s financially prudent to save for annual expenses. If you pay for your child’s school fees on an annual basis, instead of monthly or quarterly, then this may work out better financially. Paying insurance premiums annually may be better in some instances.
Save for unforeseen expenses
Establishing an emergency savings fund can be a good way to ensure that you can pay for any unforeseen expenses. If you have to pay for a funeral or an unexpected medical emergency, then having access to funds in your time of need is ideal.
The unpredictable nature of life means people need to be as prepared as possible. While it may be tempting to use all the money they have available at any given point in time, it’s much more financially-responsible for individuals to realise why it is important to start saving.