Categories Savings

Why Is Saving Money Very Important?

Nowadays, we all know that the prices of almost all commodities have increased. Not to mention the utility bills as well the insurance premium that everybody has to pay every month. This is the primary reason why a lot of people are having a hard time making ends meet, and they end up not saving even a small amount of money.

Also, some people would like to enjoy the extra money that they have to pamper themselves. This is not bad, but then it is not right to spend everything, without setting aside something. No matter how much bills you have to pay, or how much stuff you want to buy for yourself, it would be a good practice to ensure that you save some cash every time you get your paycheck.

So, why is saving money quite important?

To Become Financially Independent

freeIf you are living paycheck to paycheck, and you find ways to spend up to the last cent of your earnings, then you will never become financially independent. What if you suddenly lose your job? Or what if there is an emergency? Then you won’t have anything to fall back on.

On the other hand, if you have savings in the bank, you won’t have to worry about getting broke. You also won’t have to always rely on your salary or somebody else, like your parents, because you know for a fact that you can stand on your own feet.

Someday, you can use your savings to invest in something or perhaps make a major purchase, such as your dream car or a luxurious home.

To Have Something to Use During an Emergency

Things may happen when you least expect them. Your vehicle may break down, or you probably might need some urgent repairs to be done in your home. There could be medical emergencies too. All of these are unforeseen, and they might not be a part of your budget.

If you have savings, though, you are prepared for any unexpected expenses. You don’t have to borrow money from your friends or lending companies.

To Avoid Having Debts

If people have emergencies or any expenses that are not within their budget, their usual response is to borrow money somewhere. But this is not good at all times. Take note that if you borrow some cash, especially from the banks or lending institutions, you can expect that they come with interest and other charges. If you are not careful, you might end up drowning in debts. But if you have savings in the bank, you will never resort to borrowing money.