A penny saved is a penny earned means it is as beneficial to save money that you have already earned just like it is to acquire more cash. It encourages people to develop a saving culture. To save money implies putting aside a fraction of your income as a reserve or spending less by a certain percentage. Saving regularly ensures your money add up and keep increasing.
Saving money begins with your mindset; do not think of money-saving strategies as restrictive.
How save Money?
Figure out the amount of money you spend and keep track of your expenses. Once you have the details categorize your expenses and total each amount. Next, organize your expenses into a realistic budget. This will allow you to plan how you will spend your money and reduce overspending. Create a saving category in your budget and make an effort to save 10-15 percent of your budget.
Importance of saving
- For retirement; the sooner you start saving for retirement the more the cash will be in your account and the less you will need to save in future.
- To use as down payment; the price you will pay for your dream house will depend a lot on the amount you will have saved for use as an initial deposit.
- Positive feeling; saving money makes you feel great knowing that you are doing something important not only for your but also for your loved ones.
- Financial freedom; saving enough money gives you the amount of cash you need to meet all your financial obligations.
- Sinking funds; saving money enables you to set aside some cash that will take care of unexpected expenses like repairs and improvements.
- Vocation and luxury items; saving gives you the necessary financial strength to have fun, buy your and fancy items.
- To lead a fulfilling life; planning for your future and setting aside some cash towards the same save you from huge
psychological, emotional and physical consequences of living in deplorable conditions.
- Education; with the ever-increasing cost of college education, you need to set aside some money for the same will reduce the need to take a student loan.
- Role model; Setting aside money serves as a teaching example for your children. Involve them in your saving process and they will practice it till adulthood.
- Prevents certain health conditions; knowing that if your income generating activity collapse you will be in a disaster is stressful and can lead to anxiety and heart problems
- Pay a debt; even if you think you are a skillful planner, unforeseen expenses can leave you with huge debts. To get out of such debt, you need to save so as to settle it.
- Makes you happy; saving ensures you have adequate cash. Knowing you have enough money to spend when you need it makes you happy.
- Pursue Opportunities; savings give you many choices in your life decisions. You can choose the time you want to start your retirement and what you will be doing during retirement.
Change your mindset and start believing that you can save. Come up with a budget to ensure you do not waste time on impulse purchase and aim to set aside 15 percent of your expenses. That way, you can have enough money to do a lot, including treating your family, taking care of emergency and sustaining your family in the event your job comes to an end.
By: Joni Kim