I hear it all the time. “I can’t afford to save money.” Sadly, you can’t afford not to save, and these reasons savings makes money for your future are the base of that reasoning. Being without a savings account is one of the most dangerous things you can do to your finances. In fact, it puts you on the edge of a teetering rope of financial doom. So, to set the record straight, I am going to spell out a few reasons why it really is necessary for you to have an emergency savings plan in place.
How Savings Makes Money For Your Future
It prevents further debt from building up. It’s just practical to look at what happens when you have an unexpected emergency. If you are like many, and live paycheck to paycheck or with little to spare, when a big expense happens out of the blue, you are likely looking at your credit cards to handle it. If you can’t afford it this month, then you aren’t going to be able to pay it off next month. Using credit to pay for an emergency expense only creates more debt, which creates more problems in your regular budget. Learn how to start saving money today.
If you don’t have added debt to worry about, you aren’t paying more interest and fees. This saves you money and brings you bottom line a bit more in the clear. If you aren’t building up debt, you aren’t as financially strained month to month, and that will allow you to put more money back into savings. It’s a win-win situation that can only result in more money in your savings for future use.
It does actually earn interest which is free money for you to use. While it may no add up to much, savings accounts almost always have an annual interest rate you will earn. There are often stipulations with this. Things like keeping a minimum balance, or it being annual earnings and not month to month. Regardless of what they are, this is literally the best example of how savings makes money for your future.
- Shop around to multiple banks to find the best savings account plan with highest % interest earnings, and lowest minimum balance required.
- Avoid using emergency savings for anything other than true emergencies.
- Check interest rates at area banks at least once per year to make sure you are still getting the best possible rate.
Saving money teaches you true financial responsibility. Adult or not, it’s hard to manage money. Committing to putting money into savings is an excellent lesson in financial responsibility. The result is that you are more likely to make good financial choices for years to come, which will prevent you from making bad decisions and result in more money in your coffers in the long run.
The more you save the easier it gets. It is true. The longer you commit to saving money the easier it gets to manage each week or month. Once you train yourself to no longer consider those funds usable, it will be easy to put that money away and forget it until or if it is needed for an emergency. If you want to know how savings makes money for our future, it’s simple. The more you save, the more you have available. The more you have available, the higher amount of interest you will earn. The more interest income you earn, the better your overall financial life will be, and thus, you will have extra money later in life that you didn’t think you would have.
Related: 60 ways to save money today!
Everyone wants to have savings, but many feel they cannot afford to save. While you may live paycheck to paycheck and feel there is no wiggle room in your budget for savings, you absolutely cannot afford not to save money. With hard work and lots of time thinking through your budget and planning, you can easily watch as your savings makes money for your future.
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